The Rental Market - Gauteng

The Rental Market - Gauteng

Category Rentals

The Rental Market - Particular to Bryanston and Douglasdale

by Rochelle Holland

Landlords have faced significant challenges over the past two years (since the announcement of the worldwide Covid-19 pandemic in early 2020). The rental market was hard hit when Lock Down was enforced in South Africa in March 2020, leaving multiple Landlords with vacant properties and a loss of rental income. TPN (Tenant Profile Network, a company with nationwide rental statistics) reported a vacancy rate of 11.39% in quarter 3 of 2020. This was an increased vacancy of nearly 2%, as in quarter 3 of 2019, the vacancy rate was reported at 9.42%.

While facing vacant properties and income losses, Landlords also found themselves in a position where the Landlord's rights were suspended or delayed, for example, executing evictions of non-paying Tenants.

According to TPN, the hardest-hit sectors were both the low-end and luxury property markets. The mid-market stayed relatively steady, given market conditions. Property rentals of R25 000 per month and higher had a 23% vacancy rate in quarter 3 of 2020. This was evidence that many households were downscaling and that expatriate or corporate relocation contracts had slowed significantly.

Seeff Sandton experienced similar conditions in mid to late 2020, with very little to no new rental placements being concluded in the price ranges exceeding R17 000 per month. Bryanston is a particular example of this. Bryanston is one of the most affluent suburbs of Johannesburg and has many large homes which come onto the rental market. Bryanston's luxury homes fetch as much as R80 000 per month in rental income, usually. Our own record rental in Bryanston is a lease of R100 000 per month (concluded before Lock Down).

Looking back at the first half of 2021, when Lock Down levels were eased, the national rental market started to see vacancy rates stabilizing. However, this was likely precipitated by Landlords being forced to revise rental prices downward to secure Tenants. Generally, it became a Tenant's market (many properties - few Tenants). The reduced inflation rates encouraged many Tenants to buy property rather than rent, thus making the pool of Tenants smaller.

Seeff Sandton did see a slight uptick in luxury rental leasing for the Bryanston suburb during 2021, however, at reduced prices from the norm. Rental prices came down by as much as 23% in Bryanston luxury homes at that stage. Although this was quite a drastic reduction for the Landlords, the good news was that we were once again securing Tenants for the luxury homes. One example is a property situated in Westminster Avenue, Bryanston, which was let by our former rental agent (now sales agent at Seeff Sandton), Tanya Reddy, at R46 500 per month, in April 2021.

By the end of 2021, according to TPN stats, Sandton, in particular, saw an average gross yield of 9.9% for sectional title rental properties and 6.13% for full title rental properties. The average full title rental was recorded at just over R16 000 per month, and sectional title units were at an average of R10 000 per month at the end of 2021.

There was a comparative adjustment in one of Bryanston's neighbouring suburbs, Douglasdale. Although Douglasdale would not be classified as a luxury rental market, we see mid-tier rental prices in the various homes and closed community Estates in the suburb.

Throughout 2021, the Douglasdale Retirement Village (a sectional title Estate in the heart of Douglasdale) remained a popular estate for Tenants working with our Rental Agent, Albie During. Albie managed to secure, on average, one lease per month at a rental price of R14 000 in this estate alone.

Statistics SA published results in the most recent General Household Survey, which showed that 48% of the national rental housing market is Gauteng.

Our rental agents are again working closely with the Corporate Relocation Companies, as well as private individuals, and we see a bounce-back in the luxury-end rental market. Although rental prices may still be somewhat reduced, it is encouraging progress for our Landlords. Through the first quarter of 2022, we now see an improvement in both rental pricing and lower vacancy rates.

Seeff Sandton remains available to assist Landlords and Tenants in the Sandton suburbs and those in Fourways and Midrand. Please contact our rentals office should you require our services: 011 784 1222. Our agents and staff would be glad to assist.

Author: 1532