Several of the residential areas lying to the north west of Johannesburg – notably North Riding, Randpark Ridge, Weltevreden Park, Northcliff, Fourways and Bryanston – are now experiencing the worst rental stock shortages they have ever been through.

“When we do list a property for rental on our website we will get up to 80 hits per day,” said Sean McCauley, Rawson Properties Northern Region director.

“We are very short of properties in the entire Northern Suburbs region of JHB, such as Sandton, Fourways and most parts of the Randburg side,” said Raal Nordin, CEO of Only Rentals.

This, said McCauley, has created a buoyant market for investors: His Randpark Ridge franchise recently sold a home for R495k on which the buyer has from day one been able to achieve a rental of R4,500, i.e. an 11% return which is far higher than the average.

“This return also excludes any capital appreciation that the property may achieve, and with the major South-African banks predicting property price increases of between 5% and 8% this year, it may be possible to achieve returns in excess of 15%,” said McCauley.

Asked to what he attributes these stock shortages, McCauley said the decentralisation of the traditional Johannesburg CBD has much to do with it.

“New, important business nodes are now flourishing in Sandton, Randburg, Cresta and Fourways, and Johannesburg traffic being what it is, people now want to live as close to their work places as possible.

“Also contributing to the shortage has been the economic downturn: Many second and third home properties rented out by investors have had to be sold as a result of the recession which has reduced the number of homes in the rental market. In addition, many ‘distressed’ owners of homes have had to sell and are now also looking to rent.”

Nordin says there are, in his view, two big reasons why the rental stock shortage in these areas is so low.

“Firstly, people are unfortunately holding on to their properties because of the Soccer World Cup. Secondly, people move from smaller towns and the coast at the start of each year to come to the big city to find better work opportunities, and/or to grow their own business. They prefer to rent until they have found their feet, and decide on the best place to invest in.

Nordin adds that the biggest stock shortage is generally being felt in the affordable category. “More specifically, this would include affordable entry-level townhouses and simplexes ranging between R4k to R6,500 and anything from 2-bed, 1-bath to 3-bed, 2-bath. These comprise 85% of our enquiries.”

McCauley says the property website Property Genie reports that enquiries for northern suburb properties have reached an all-time high and that Bryanston and Northcliff are in the top five suburbs in Gauteng as far as enquiries are concerned. – Eugene Brink

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