Pretoria, seat of the executive branch of government, host to all foreign embassies in the country and home to a prosperous economy, remains a busy property market and while the rental sector has faced Covid-induced financial challenges, it is performing well according to the Seeff Property Group.
This is in large part facilitated by property owners accepting low to no rent increases to keep good tenants. The area remains a top choice for tenants for a variety of reasons including the high prevalence of security complexes and estates, schools and amenities. PG van der Linde, rentals manager for Seeff Pretoria East, says the high demand is still in the affordable price band of R7 500 to R15 000 per month and ranging to about R25 000.
Properties which offer better value are always favoured by tenants. He says it remains paramount for property owners to get a rental valuation which is accurate to current market conditions to avoid the risk of vacancy and potential financial losses. Competitive pricing remains important to counter the low interest rates and oversupply of rental properties. For this reason, he says rental escalation rates have been zero to negative to mitigate vacant properties by retaining good paying tenants.
Using a reputable agency which will not skimp on credit checks for the sake of placing a tenant is also important. A vacant property is not ideal, but a tenant who cannot afford the rental or does not pay, is far worse, he says. Although sectional title property is affected by high levies which impacts the yield that property owners can expect, these remain in high demand which means a lower vacancy rate and often, a more consistent yield in the long run.
Tiaan Pretorius, manager for Seeff Centurion says property owners have had to adjust to the price sensitivity in the current market. Most existing rentals did not increase, and where there is an increase, it is generally kept below the CPI rate. Rental yields have stayed the same offering fair value for existing landlords. For new buy-to-rent investors there are still opportunities in the market which offer potential for future returns on their investment.
There is always strong demand for sectional titles in well-managed complexes and free standing homes in secure estates. Most in demand are two-bed units in the R7 000 to R8 500 per month range and R9 000 to R10 000 for three-bedroomed units. Security estates are currently attracting tenants predominantly in the R15 000 to R20 000 range and luxury homes in the R20 000 to R25 000 range. New developments especially in the lower points in the rental market is going to dictate what is going to be the new market related rentals landlords would be able to charge.