Flat rentals buoyant in downturn

Johannesburg - Average flat rentals in South African cities gradually increased during the worst recession since the 1980s.
 
The latest figures in Trafalgar’s national rental index show that rental growth was relatively elastic in the economic downturn, largely because during this period people preferred to rent a dwelling rather than buy a house.
 
In the nine months to March this year the rental index rose 7%, which amounts to an annualised 9.5%. This is, however, lower than the 11.2% rise for the year to June 2009.
 
The Trafalgar index monitors the increase in rentals in similar two-bedroom flats in the Trafalgar portfolio in metropolitan areas countrywide, to eliminate distortion that could be introduced by new trends.
 
The sample comprises 50 to 70 flats in each metropolitan area.
 
The area showing the highest rental increase was East London, with 14.3% growth in the nine months to March. Over the past six years since the Trafalgar index was developed, East London has produced compound growth of 13% a year.
 
In contrast, KwaZulu-Natal rentals went up by 4.25% for the nine months to March, while the Johannesburg increase was 4.8%.
 
Trafalgar is the country's largest residential property management and letting agency, with a total portfolio of 50 000 residential properties under management.
 
These include bachelor flats and one-, two- and three-bedroom flats as well as sectional title complexes.
 
Households that would normally buy a home were forced by the economic slump to rent, which supported the rental market, Trafalgar said. There are very few empty flats in Trafalgar’s portfolio, but bachelor flats currently comprise the weakest segment.
 
- Sake24.com
 
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