RENTAL vacancy rates had stabilised at 13.15 percent, meaning tenants were still in the market, but in reduced numbers, a vacancy survey for the second quarter of 202 showed.
The survey, conducted said a Supply Rating of 68.76 meant landlords were competing for this limited tenant attention.
“It’s a tenant’s market, an oversupply of vacant properties is driving down rental prices as tenants are in the position to shop around for a better deal. Price sensitivity is a critical consideration and remains the most important aspect for a tenant, followed closely by security and then distance to work, schools and shops,” said TPN Credit Bureau chief executive Michelle Dickens, said yesterday.
Landlords had a more pessimistic perception of the market. They reported a weaker view of demand at 51.50, and perceived a strong Supply Rating of 73.32.
“No doubt driven by fewer tenants responding to their property adverts, in some instances landlords report zero interest in the property until the price is dropped and re-advertised,” the survey said.
The vacancy rate reality reported by landlords was a high 14.29 percent.
“This begs the question, did landlords react slower to reducing their rent and so bear the bigger brunt of overall vacancies,” Dickens questioned?
Estate agents benefited from foot traffic through their shop, or many adverts for a variety of properties to entice the reduced number of tenants.
As a result, the estate agent’s perception of the market strength indicated slightly more tenant demand than landlords perceived.
Estate agents also perceived the supply of rental properties to be strong at 63.31 but not as overstocked as the landlord’s perception of 73.32.
“This may be an impact of the estate agent property stock supply which is created by landlords farming out their tenant procurement to multiple agents at the same time.
“Nonetheless, estate agents seem to have better occupancy with only 9.87 percent vacancy rate,” said Dickens.
Although Gauteng estate agents and landlords were faced with diminishing demand, vacancy rates in the second quarter recovered from 13.8 percent to 12.4 percent quarter-on-quarter.
Sandton was a concern with a high 26.7 percent vacancy rate. This was due to the impact of office-to-residential conversions, with large lease-up portfolios of quality new units with enticing incentives, putting pressure on this area.
In Gauteng, home to half the population, the perception of recovery was not showing in the data yet among estate agents and landlords.
In Cape Town, there was increased supply caused by converting short-term holiday rentals into long-term lets and work-from-home opportunities which allowed tenants to relocate to the more affordable northern suburbs.
“Overall, the Western Cape vacancy rate of 14.4 percent will be a worry as this is the first time the vacancy rate has breached into double digits.”
But 82.92 percent of Western Cape tenants were back in good standing. Only 5.6 percent of Western Cape tenants were in the did-not-pay status.
Some 11.48 percent percent of Western Cape tenants remained in the partially paid status.
In KwaZulu-Natal, the potential shock of the pandemic on market strength was cushioned by a recent history of limited supply of new rental property stock.
“The biggest threat to the recovery of the residential rental market remains the persistently high and increasing rate of unemployment. Household size is expected to increase as co-living becomes a solution for affordability while tenants get back on their feet financially,” the survey found.
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