Many millennials are renting in Soweto
Soweto is home to around 40% of the total Johannesburg population and this coupled with the fact that not many people are able to afford to buy property in the current economic climate is fuelling Soweto's rental market.
Other reasons that are contributing to the big rental demand are the many developments like the Lufhereng Development, Elephant Eye and Retlosebetsa currently taking place in the area.
The area has also become a big tourist attraction, bringing many visitors and entrepreneurs to the area and the easy access that Soweto offers to the Johannesburg City Centre makes it a desirable place to reside.
Khosi Sibiya and Phindi Mphahlele, owners of Seeff's Branch in Soweto, say the rental market here is continuously growing. This is illustrated by the many queries they have recently received from either landlords looking to let their properties or tenants searching for rental accommodation.
"Areas such as Pimville, Diepkloof and Orlando are especially in high demand because of their proximity to amenities and work places. Areas such as Protea Glen and Mndeni for instance are not as popular due to the fact that they are a bit further from everything, but reasonable rental rates are the norm here.
The greatest rental demand is definitely for property priced between R4000 and R5000 per month. Tenants prefer to be on the ground floor with easy access to a small garden or outside space as the demand for upstairs townhouse units is low".
Sibiya and Mphahlele say that millennials is the largest generation residing in Soweto at the moment and that they are also the group who rent the most.
"Millennials are moving out of their parent's homes and forming their own independent households and like the generations before them, they prefer to rent before they buy.
Many middle-aged buyers who started off living in Soweto have also since left the area to buy property elsewhere, but Seeff is seeing the trend of many of them returning to the property market here - often deciding or only being able to afford to rent."
Sibiya and Mphahlele conclude that the property values in Soweto's 37 suburbs are continuously on the rise and because of this the area is increasingly appealing to a middle class market.
"Completed developments, the upgraded road infrastructure, the Rea Vaya bus system and commercial infrastructures have all added to making Soweto a place people want to invest and where people want to live in where this was not necessarily the case two decades ago.
Rental rates in Soweto at the moment are around R2 500 per month for a one bedroom apartment, R4000 per month for a two bedroom apartment, R4 500 per month for small homes and R7000 per month for large homes with two garages and possibly a swimming pool.
Areas in Soweto with the most affordable rental rates include Protea Glen, Bram Fischerville and Lufhereng and the most expensive rentals can be found in Diepkoof, Pimville and Dhlamini.
There is also a demand for student rentals in especially Pimville as it is close to the Soweto campus of UJ. Prices for student rentals here range between R2500 and R3000 per month."
This four bedroom home in Dhlamini is to let for R7000 per month.
Author: Tanya Van Buuren Botma