However, investors can take relief in only having to deal with 3.9% of non-paying tenants.
The Western Cape also enjoys the second-lowest vacancy rate of 7.08%.
Michelle Dickens, the managing director of TPN’s credit bureau, said: “The Western Cape story is characterised by a dramatic three-year decline, during which the market strength plummeted from 85.57 to 45.32, driving down escalations and pushing vacancies from 1.2% to the current 7.08% (marginally better than the 9.9% reported in the last quarter).”
Dickens said although Gauteng commanded the largest market share, a recent surge in new rental property stock had resulted in supply now exceeding demand, with a market share index of 46.32. The consequent oversupply has driven vacancies higher to 8.3%.
Meanwhile, a dramatic three-year decline in foreign buying as well as a decline in migration from other parts of South Africa, and a decline in house-price growth have affected the Western Cape’s property market.
Lorraine-Marie Dellbridge, rentals manager in the Southern Suburbs for Lew Geffen, Sotheby’s International Realty, said: “The rental market is definitely more buoyant than the sales market at the moment. We have seen an encouraging uptick in enquiries.”@MwangiGithahu