Rentals in Mother City are holding up
Property owners renting on a short-term basis are achieving above-inflation growth, says Andrew Golding
Cape Town’s short-term residential rental market is bucking the national trend of weak demand due to easing water restrictions and a tourist uptick.
Pam Golding Properties CEO Andrew Golding said that owners who rented their properties out on a short-term basis were achieving rental growth that was still above inflation.
This was while short-term rental growth was about 3% and 4% in Gauteng and Durban.
"There is a wide range but anyone who rents a property in Cape Town should get a rental yield of between 8% and 10% at least. We are still seeing luxury properties rented out for as much as R20,000 a day despite the recession," he said.
The average national rental escalation is about 3.75%, the weakest since the 2008-09 global economic crisis, according to TPN Credit Bureau data.
Other parts of the Western Cape are also experiencing relatively strong rental growth. According to quarterly data released by TPN, the Western Cape’s average rental escalation was 7.86% at the end of June. It peaked at about 14% at the end of June 2016. This was stronger than the national average and Gauteng, which was at 6.15%.
Since water restrictions have been relaxed, more tourists are visiting the Mother City and are visiting earlier.
"The season usually starts from around September and October and lasts to April when the last foreign visitors leave, but bookings are already in full swing," Jason Da Costa from Seeff Properties Atlantic Seaboard said.
Online rental booking site Airbnb had boosted the short-term rental sector for people who let their houses out through estate agents.
"A person may visit the Cape at a property that they found on Airbnb and tell their friends that they had a good holiday.
"Those friends may then … rent using Seeff as we can find them something that meets their prerequisites," he said.