George Herald | Rental property in hot demand on Western Seaboard

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Rental property in hot demand on Western Seaboard
10:30 (GMT+2), Fri, 17 August 2012

PROPERTY NEWS - Demand for rental property along the Western Seaboard currently exceeds the supply, says Caron Leslie, Broker/Owner of RE/MAX Property Associates, whose office services the Cape's western coastline.

She notes that properties in the rental market on the Western Seaboard are being snapped up by tenants instantly. "Rental agents used to be able to show a variety of properties on the market before the tenant would make their decision. However, due to the major demand for rentals, that is currently no longer the case and agents are lucky if they are able to show one or two rental properties to any prospective tenant," she says.

Warren Leslie, independent contractor for RE/MAX Property Associates, who works with numerous rental properties in the area, says that although the number of new rental properties that have entered the market this year has grown by 20%, demand still outweighs supply.

"This is largely due to the fact that many tenants are renewing their leases under the current stock shortage. They are also renewing their leases because of the value for money rentals they are paying, even though most leases are providing at least a 7% return for the property owner. The rental market has also largely been influenced by the fact that so many potential homeowners have been unable to obtain bond approval."

Adrian Goslett, CEO of RE/MAX of Southern Africa, says that while bond approval rates have steadily improved over the past few quarters, just over 50% of the applications received are approved by the various financial institutions. This means that many prospective homeowners will need to continue renting until such time as they meet the necessary credit criteria to obtain a bond.

Leslie says that the majority of the tenants in the area are families or professional executives so the most sought-after rentals are three-bedroom townhouses or family homes that range from R5 000 to R8 000 per month. Single folk or young couples can find smaller rental apartments ranging from R 3800 to R 5000 per month, while large family homes will rent out for around the R15 000 per month mark, depending on the features.

"The upper end has been a little quiet, however we have secured corporate rentals in the Big Bay Estates for R 35 000 per month," says Leslie.

He says that the tenants have benefited from the rapid growth and development in the area, with the initial leg of the Bus Rapid Transit System completed. A trip to Cape Town CBD can cost just R10, which is affordable and convenient.
Caron Leslie maintains that areas along the Western Seaboard such as Bloubergstrand have become so much more than a little West Coast suburb.

"We predict that demand in the property sale and rental market will continue to grow in the future. In their recent presentation, Tenant Profile Network said that on average 88% of rentals are paid on time in the Western Cape. That makes the area an excellent place to invest in a rental property," she says.

RE/MAX Property Associates currently have a furnished three-bedroom penthouse rental on their books situated in Bloubergstrand, priced at R30 000 per month. The property offers 24-hour security and concierge, large open-plan living areas that lead to balconies with views of Table Mountain and the Atlantic Ocean. The unit comes with three basement parking bays and one storeroom and is close to Eden on the Bay mall as well as other local amenities.