Note from Susan: Further to the previous article, I am pleased to say the positive forecasts were correct! Most agencies have not been able to keep up with rental demand since January, pushing the rentals to pre-Covid amounts.
The residential rental sector started to show real signs of renewal in the fourth quarter of 2021 with key national property indicators revealing that the sector is through the worst of the economic storm.
This is according to TPN Credit Bureau’s Residential Rental Monitor, stating that based on the current trajectory, further recovery is expected during 2022. However, tenants are likely to continue to be under pressure.
Low inflation and the need to stimulate a fragile local economy during the pandemic resulted in historically low prime interest rates. One of the consequences of this was a perception of cheap capital and artificial demand.This, combined with an increased number of distressed estates and human capital
migration, created an over-supply of property in some areas and, in complete
contrast, hyped demand in previously ignored locations of South Africa. As historical trends have shown, this imbalance will have to correct itself in time.
The low number of property transfer that occurred in 2020 was no surprise. A bigger
surprise is that 2021 recorded an even lower number of property transfers.
However, while full-time employment decreased, part-time employment grew by 16.5%. These trends are likely to impact the residential rental market.