JOHANNESBURG - The percentage of residential tenants who paid in full and on time declined further in the second quarter of this year and has deteriorated cumulatively by almost 7 percentage points since the third quarter of 2014.
However, Tenant Profile Network (TPN) credit bureau said the percentage of tenants “in good standing” increased slightly in the second quarter to 82.83% from 82.77%in the first quarter.
Tenants in good standing comprise all tenants who paid on time each month, those who paid late and those who received a grace period in which to pay.
“This means that a portion of the increased financial pressure on the tenant population in recent years has not been witnessed in the ‘in good standing’ percentage, but in a rise in the percentage of tenants paying late or requiring a grace period,” TPN said in its latest rental monitor. It said the percentage of tenants paying rentals late, in part or not paying at all rose to 17.05percent in the second quarter of this year from 16.7% in the first quarter.
At the end of 2012, the percentage of tenants paying rentals late, in part or not paying at all was 11%. However, TPN said that, by historic standards, the most recent level of the percentage of tenants in good standing remained solid, despite being moderately lower than the 85.95% multi-year high reached in the third quarter of 2013 shortly before interest rates started to increase.
However, TPN said tenants who paid in full and on time were first prize from a landlord’s perspective, but had declined to 65.78% in the second quarter from 66.08% in the previous quarter. It said the seven-percentage-point decline in tenants who paid in full and on time since the multi-year high of 72.52% in the third quarter of 2014 was a more significant decline to date than the almost minus 5percentage point deterioration in the “in good standing” percentage.
TPN believed it was possible to have some near-term improvement in the percentage of tenants paying on time and those in good standing because of the onset of declining interest rates, coupled with a declining household debt-to-disposable income ratio.
TPN said there was a further noticeable deterioration in the second quarter in the payment performance of the lowest monthly category (those who paid less than R3000 a month).
TPN said the percentage of tenants in the less than R3000 a month rental category who paid on time weakened from 55.5percent in the first quarter to 53.85percent in the second quarter, the lowest level of any of the five rental categories.