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Joburg tenants ditching Sandton apartments for estates

unit-810-in-the-metropolis-on-park_shaun_lg-r-fourways_lk-06There has been a shift in demand for rental apartments in Sandton’s CBD due rampant development and oversupply, and this is being echoed in other northern suburbs that have traditionally been affordable and family oriented, and are now faced with a free-standing home market that is proving increasingly difficult to let.

This is according to Shaun Groves, Gauteng rental manager for Lew Geffen Sotheby’s International Realty, who said correctly priced homes in cluster developments and security estates have seen the least decline in demand.

The rental markets in the “Parks”, however, appear to be operating independently from the general Gauteng market, with a continued status quo of high demand and low stock.

“Parkhurst, especially, is somewhat of an anomaly with its unwavering gross yield of around 9%, which is largely due to the suburb’s distinctive cachet and lifestyle appeal that has long been recognised across multiple demographics,” said Groves. “In fact, it is one of very few suburbs that even buyers who are downsizing from stately homes on generous grounds in neighbouring areas still perceive as exclusive and well matched to their lifestyles.”

Gauteng’s rental market growth has managed 4.8% since the beginning of the year, according to Payprop’s Q3 Rental Index Report. This is considerably lower than the 6.4% national average and disheartening for a province that has historically provided stable growth of around 8%.

Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty, said the national statistics are skewed by the almost excessively buoyant Western Cape rental market that’s running at year-on-year growth of 9.32%.

“I predict that the current socioeconomic climate will not only continue to influence a depressed market well into 2017, but also tighten its grip on already cash-strapped consumers who will be increasingly susceptible to defaulting on payments as their limited financial wiggle room shrinks even further,” he said, noting that Gauteng tenants currently owe on average 40% of their pre-tax income to credit providers, compared with 33% in March last year. “The increased debt load is largely due to the fact that they have more store accounts and credit cards than their counterparts in other provinces.”

Photo: This fully furnished two-bedroom apartment in Sandown boasts panoramic views over the Sandton skyline. It is to let for R35,000 per month, and includes a storeroom and two parking bays as well as access to myriad amenities, from sports facilities to meeting rooms.


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