Quality and well priced rental properties in some parts of Johannesburg north are reportedly being snapped up quickly as they come into the market.

Groves explains that three to four months ago areas such as Bryanston were performing well from a letting perspective. Bryanston is now experiencing a drop-off because many of the landlords in the area have become unrealistic in terms of their rental income expectations.

According to Pam Golding Properties (PGP), the demand for these properties has led to shortages in some areas.

Shaun Groves, PGP rental manager for Johannesburg northern suburbs, says where properties are correctly priced, landlords generally have little trouble in renting them out.

He says that as in property sales, there are still some owners who are overpricing their properties which result in these homes not getting any tenants.

In such cases agents have to undertake price counselling with the property owner to ensure that a realistic, market-related rental is set and achieved.


Groves explains that three to four months ago areas such as Bryanston were performing well from a letting perspective.

Bryanston is now experiencing a drop-off because many of the landlords in the area have become unrealistic in terms of their rental income expectations.

“With excessive rentals being asked tenants would rather find a property in Hyde Park, Sandhurst or Morningside,” says Groves.
 
Groves says Hyde Park and Sandhurst are back in vogue and other top performing suburbs in terms of rentals include Parktown North, Parktown, Dunkeld, Westcliff, Morningside, Sandown and Hurlingham.
  
Asked whether the demand for rentals was being driven by difficulties in accessing credit, Groves says he believes this is not such an important factor in the rental market in the northern suburbs.

“Many tenants are professionals, corporations and expats seeking fairly short-term accommodation ranging from anything between six months and three years.”
 
He explains that the majority of tenants are foreign corporates and local professionals creating a demand for accommodation closer to the Sandton CBD.

Apartments are popular in some of these areas while more affluent professionals are looking at homes in established areas such as Westcliff, Parkhurst and Parktown.

Homes in Parkhurst and Parktown North are in demand and there are huge stock shortages in these areas.

“Professionals and executives enjoy the cosmopolitan lifestyle while the smaller stands in these areas give an added sense of security and convenience.”
 
Rentals depend on location and foreign companies do have limits to their budgets and are price sensitive.

“Rentals should therefore remain competitive and realistic.”

There does seem to be an increased demand for everything to be included in the rental such as furniture, servicing and security as corporate tenants want to be able to offer their employees an all-inclusive package, he says.
 
Groves advises tenants to maintain a good credit record and previous landlords are also contacted for references.

He says if any problems such as rent default come to light these are reported to the landlord adding these checks are vital to protecting landlords.

Apartments are popular in some of these areas while more affluent professionals are looking at homes in established areas such as Westcliff, Parkhurst and Parktown. Homes in Parkhurst and Parktown North are in demand and there are huge stock shortages in these areas.

RealNet is reporting increased rental activity at platinum mines near Mokopane which has boosted the town's economy and prompted a sharp rise in residential rentals over the past year.

Esther van der Merwe of the local RealNet estate agency says the area recorded average rental increases of 20 percent in the past 12 months and in some cases, rentals increased by 50 percent.

As an example, she says some family homes with three bedrooms that were rented out for about R4 500 in 2010 now command rentals of R6 500 a month.

Van der Merwe says the increases come off a low base as a result of the economic downturn in 2009 which led to mine closures and large-scale retrenchment.

However, she says the performance of the rental market this year was nothing short of spectacular. 

"Demand remains strong and we expect the trend will continue in 2012.”

The mines, by far the largest employer in the area, are still appointing contractors and new employees all of whom need accommodation.

The influx of new employees has also stimulated the buyers' market.

Van der Merwe says new permanent employees are keen to buy homes and black buyers now dominate in the market.

"They have a strong culture of saving and are generally able to come up with the minimum deposits required by banks,” she says.

She says these buyers target newer units and prefer developments that offer high security.

Single buyers buy townhouses in the R500 000 to R850 000 price range, while those with families buy larger units in the R800 000 to R1.2 million range.

Buying vacant stands and building their own homes is now also a very popular option and permanent workers who have saved deposits have no trouble obtaining finance of up to R2.5 million to build their homes.

Meanwhile, white workers target older properties in more established areas as they see opportunities for upgrades and subsequent value growth.

She adds that investors in rental units were never really absent from the market even during the sharp decline experienced last year, but the growth in rentals has stimulated renewed interest. – Denise Mhlanga

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