Seeff offers insight into Mpumalanga's rental market
Category Expert Insight
A sharp decrease in demand for expensive rental property, a bustling market in the R5 500 to R10 000 per month segment and more people choosing to rent due to the uncertainty of job security are some of the prevalent trends in Mpumalanga's rental market at the moment.
Christoph Brink, Seeff's Rental Marketing Manager in Nelspruit, says this City has witnessed a marked slowdown in more expensive properties and suburbs priced above R15 000 per month, while they are experiencing a major shortage in properties priced between R7000 to R10 000 per month.
"Multiple applications are received for property that offers good value for money in this bracket. With regard to luxury property we don't have an overstock, but it definitely takes longer to lease a more expensive property than an affordable one."
Brink continues that properties for sale in Nelspruit in the lower brackets offer fairly similar installments to rental amounts and therefore buying a property in this bracket for investment purposes could be a good decision, but he warns that large returns must not be expected.
"Buyers also need to keep transfer costs, maintenance, insurance and rates and taxes in mind. That being said, you probably won't have a problem finding a tenant for your property in the R7000 to R10 000 per month price range."
Brink concludes that pet friendly developments in Nelspruit are scarce and is therefore in high demand.
"Security is also an important consideration and we see a 10% - 20% higher rental rate asked for properties located in security estates."
Willemien Badenhorst, Seeff's MD in the mining town of Middelburg, says the rental demand in Middelburg's more secure suburbs that are located close to the shopping mall and highway are experiencing a high rental demand.
"Duets and freestanding homes in the R8 500 - R9 5000 price bracket is experiencing the highest demand, while demand for property priced over R13 000 per month is lower.
We do however see fair demand for modern properties in secure estates and have recently leased a home in a security estate for R17 000 per month. Tenants are willing to pay up to 20% more for property located in security estates."
Badenhorst continues that they don't experience an overstock in Middelburg in any segment and that most rental property here is leased within a week or two of being listed.
"We do however have a shortage in secure, pet-friendly complexes and duets priced between R3000 and R6000 per month.
The Middelburg rental market is not expected to change anytime soon as there is currently a lot of uncertainty with regards to job security at some of the mines.
Because of this many people choose to rent. These tenants mainly consist of young families and single tenants who have just entered the work force. Single tenants often rent property for only six to 12 months, while many families who rent renew their contracts year after year."
Billy Fick, Seeff's MD in Secunda, says the rental market here has taken a knock as many owners have been forced to drop their rental rates and tenants who have a positive credit score are becoming harder to find.
"Many tenants prefer to rent in secure complexes, but Secunda does not offer many of these. Consequently there is a high demand for this type of living".
Fick continues that their greatest rental demand is for property located in security complexes priced between R8000 and R9000 per month.
"Even though the demand for property priced above R12 000 per month is slower, the Seeff Secunda office has recently fetched R20 000 per month and R32 000 per month for two fully furnished properties. We are also leasing an unfurnished property for R16 500 per month in the upmarket Hibiscus complex".
Fick adds that well-maintained quality stock of one bedroom apartments priced below R3 500 per month, three bedroom apartments/homes priced at R7 000 per month and luxury homes priced between R12 500 and R15 000 per month is low at the moment.
"Many tenants in Secunda prefer to or are forced to rent due to the uncertainty in the market and Sasol's restructuring project - project Olympus, which follows on Project Phoenix from a couple of years ago.
Like in the case of many other towns in Mpumalanga, tenants in Secunda are also looking for secure, pet-friendly developments that offer safe parking.
Fick concludes that smaller, modern homes in estates in Secunda are sometimes priced lower than larger homes in traditional suburbs here.
Anna-Marie de Jager, Managing Director at Seeff Lydenburg, says the rental market here is very active and that they are experiencing rental shortages, especially in the segment priced between R5500 and R8000 per month.
"Homes in this price range appeal to families looking for three bedroom homes with a garden.
There is also great demand for smaller homes located in security complexes priced between R4000 and R5000 per month."
The rental demand in Lydenburg is always big due to many people moving here because of work and the mines' recent reopening of shafts. We find that these people prefer renting to buying, not only because of job uncertainty, but also because they don't know the area well.
Lydenburg would definitely benefit from more housing developments to meet the needs of the rental market. In the past two years security complexes have also become extremely popular.
De Jager concludes due to the stock shortages here rental property is quite expensive compared to buying a property.
Author: Seeff Property Group