A recent claim in the media that ‘one in every four tenants in South Africa don’t fulfil their rental obligations’ is unfortunate as it is based on a set of data so small that its representation of the total South African rental market is to be questioned.
This is according to credit bureau, TPN, whose Residential Rental Monitor Q1 2018 “paints a brighter picture”.
“Nationally, as many as 82.3% of tenants are in good standing,” said Michelle Dickens, managing director of TPN, who notes that as a registered credit bureau, TPN collects data from 70% of registered South African estate agents from 24 independent property management and accounting systems. “As a direct result of the number of agents who supply data to the credit bureau, the TPN data set is the most comprehensive source in the statistical analysis of tenant payment behaviour.
“What we are actually seeing in the rental market in Q1 is a small decline from 83.5% in the previous quarter, but this is cyclical as the first quarter of every year suffers from a post-December holiday hangover. We see it every year. The 82.3% of Tenants in Good Standing is made up of tenants who are paid up by month end. Tenants who Paid on Time stood at 65.35% in Q1, Paid in the Grace Period, 6.28% and Paid Late, 11.11%. As far as delinquent tenants go, 11.11% Paid Late and 6.58% Did Not Pay. The fact is that the percentage of Tenants in Good Standing is not dropping off as dramatically as is being suggested which is good news for property investors countrywide.”
To read the full Residential Rental Monitor for 2018 Q1, click here