Gauteng's rental affordability appeals as semigration reverses
Much of the move back to Gauteng is driven by the affordability of property as well as economic opportunities. Property prices are about 27% lower than the Cape (average price of R1.3m versus R1.8m for the Cape), while rentals are about 20% lower according to PayProp (average monthly rental of R9,201 versus R11,285 for the Cape).
The rental market is often where people returning or moving to the metros turn to before they even start thinking about purchasing property. Gauteng, as the biggest economy in the country, is therefore also the largest rental market with about 37.8% of households renting according to TPN.
Despite the high demand, rents have remained affordable, increasing by only around 2.9% on average over the last year according to PayProp. That said, many areas have seen increases of 3% – 5% due to higher demand and a lack of stock, thus presenting opportunities for rental investors, according to rental agents from Seeff.
Aside from more affordable rentals, the costs of living are also slightly lower in Johannesburg and Pretoria, according to Numbeo.com. The Gauteng metro areas also offer a much wider range of more affordable rentals including more entry level housing.
Christa Roos, licensee for Seeff Helderkruin, says they have observed an influx of people heading to areas in the valley (Kloofendal, Helderkruin, Wilro Park and Roodekrans), largely due to the good value for money. Rental properties move very quickly in the R15,000-plus market.
Joburg South and Alberton are very popular due to affordability, especially in the R4,500 to R8,000 per month range, says Ruth Sturgess from Seeff, adding that there are investor opportunities to earn steady rental incomes from R6,000 to R12,500 (family houses in Kibler Park).
According to Carin Buitendach from Seeff Boksburg and Benoni, these areas are very popular for its affordability in the R5,000 to R7,000 per month range, with top end rentals reaching R15,000 for a freestanding house rented out by Seeff. Rents grew by about 5% over the last year, and there is opportunity for investors to earn steady monthly rentals of R6,000 to R6,500.
Randburg offers a broad middle-class appeal, and a great choice of affordable rentals in the R7,000 to R14,000 per month range while larger homes tend to rent out in the R25,000 to R35,000-plus range.
The Joburg North West area offers affordability for those who commute for work into Randburg and Sandton. Rochelle Holland, Seeff's sales and rentals manager for the area says people often rent before they buy in the area. There is also an opportunity for rental investors in the R500,000 to R950,000 price brackets as these are very popular rentals and can earn a steady income of R7,000 to R12,000 monthly.
The Eagle Canyon Golf Estate is also very popular for rentals, priced mostly in the R20,000 – R30,000 range with high end homes renting out for up to R60,000 – R70,000.
The northern suburbs of Sandton/Bryanston/Fourways are also hugely popular with a mix of status and wanting to be close to business areas driving demand, according to Seeff Sandton. The R10,000 – R20,000 bracket is the most popular, especially for sectional titles while luxury homes range up to R45,000 – R60,000, and super homes well above this.
In the Pretoria metro, areas such as Centurion are popular for its proximity to the metro and Midrand, according to Tiaan Pretorius, manager for Seeff Centurion who says correctly priced rentals can go within hours or days. Prices start from R5,000 with the highest demand in the R14,000 to R25,000 range. Rental escalations have been in line with the CPI at between 3% – 5%.
The Pretoria East rental market has been particularly busy this year with Seeff recording some of its best months, according to PG van der Linde, rentals manager for Seeff Pretoria East. The R12,000 to R20,000 bracket has been most active. He says an added boost has come from people who are still hesitant to buy and choosing to rent for the meantime.
Issued by Gina Meintjes
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