(Residential) Landlords in Johannesburg under pressure

Posted On Monday, 19 April 2004 02:00 Published by
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Streetwise tenants in Johannesburg are learning to take advantage of the current oversupply of flats. They are putting landlords under pressure by refusing to accept rent increases.

Streetwise tenants in Johannesburg are learning to take advantage of the current oversupply of flats. They are putting landlords under pressure by refusing to accept rent increases.

"As soon as a landlord puts the rent up, the tenant moves to a flat up the road at the old rent or less," says Neville Schaefer, CEO of Trafalgar, South Africa’s biggest residential managers.

But the tenant victory may be short lived. "There are early signs of vacancies beginning to fill up," adds Schaefer. He was the first to warn early last year of rising vacancies and falling rents in parts of Johannesburg. Developers have built thousands of flats in the most popular suburbs, and many tenants have found they can afford to buy their own homes for the first time because of falling interest rates.

"Now that interest rates have steadied, and there is talk of them going up, fewer tenants are buying their own properties," notes Schaefer. "And developers have slowed down their building in the most prime areas.

"Tenants moving out when the rent goes up is now a far bigger problem for landlords than those moving out to their own homes."

He says Sandton CBD is showing the first signs of a rental recovery. "A new two bedroom flat was letting at up to R8 000/month in 2002. Last year it fell as to R5 000, and briefly even lower, as the new high rise apartments came on stream. Now have recovered – albeit very slowly – to R6 000. That recovery is still shaky and there could be further softening as more new stock comes on the market.

"But there are 45 000 commuters in to Sandton each day and about 1 000 new flats available over the next year. About 150 000 cars drive through the CBD each day and migration into the area by residents and long term visitors is growing.

"Rents will eventually rise and the high income workers in the area will happily pay them," he says.

ends

Issued by:    Kerry Osborne, Marshall Inc, 193b Lambert Road, Morningside, Durban, 4001, Tel No: (031) 303 9723, Fax No: (031)                    312 9497, e-mail address: This email address is being protected from spambots. You need JavaScript enabled to view it.


Publisher: Kerry Osborne
Source: Kerry Osborne

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