Despite some challenges, the rental demand in many areas of KwaZulu-Natal is robust. This is due to a combination of factors including the fact that many people can’t afford to buy property, new employment opportunities that have arisen, industries relocating to KZN, the launch of major projects and semigration to the North Coast, amongst others.
1. North Coast
Ballito’s permanent population has more than doubled in just over a decade and this has created a big rental demand in this coastal town.
Seeff's Mark Johnson says even though the rental market is buoyant, stock is a major issue, especially with regard to property in gated communities priced from R8 000 to R18 000 per month.
The North Coast has also been earmarked for massive residential, commercial and resort development that will bring even more people to the area.
“While we expect more stock to come onto the market in the medium term, rental demand is predicted to increase even further as a result of the growth,” says Johnson.
Families are semigrating to Ballito by the dozens - many of whom are still working elsewhere and need to commute to work weekly. This is made possible by the King Shaka International Airport about 20-minutes from Ballito.
Many of these families choose to rent before they decide where to settle - adding to the rental demand.
2. Queensburgh
While Queensburgh is experiencing rental demand for especially two and three bedroom homes, apartments and duplexes in complexes priced between R5 500 and R8 000 per month have also witnessed a decline in rental demand due to affordability issues.
Seeff's Michelle Vermeulen says with Queensburgh’s shortage of rental property, many landlords are trying to maximise their potential rental income by letting multiple homes and granny flats on the same property.
Property located in security complexes is highly sought after, especially in the price range from R5 500 to R8 500 per month. In general, a rental gets snapped up right away when priced fairly and represents good value for money.
New residential development in the Queensburgh area will offer investment opportunities to buy-to-let investors and will alleviate the rental shortage. Tenants are reminded to keep in mind what they can afford and should not overshoot.
3. Berea
Roger Hoaten from Seeff says while they expect rental demand to continue rising here, supply is expected to be constrained due to growing household debt.
“Urban creep is keeping rental prices in Berea low and the lack of university accommodation is creating demand from students for affordable rentals,” says Hoaten.
He says Berea offers many rental property options ranging from large freestanding and art deco homes to sectional title developments and affordable apartments.
“The rental price starts from around R4 000 up to R25 000 per month, but the most demand and stock shortages occur for one and two bedroom apartments in the R4 000 to R6 000 lower end of the market - in areas bordering the commercial zones of Berea and Glenwood”.
4. Mid-South Coast
Seeff's Joleen Giraudeau says the Mid-South Coast branches of Seeff cover Umkomaas to Pennington - a thriving coastal stretch also hosting Scottburgh, one of the most popular holiday destinations on the KwaZulu-Natal South Coast.
Time on the market is very limited with regard to rental stock as demand far surpasses supply. The area boasts a large array of listings in different price brackets, starting from R3 500 per month up to R30 000 per month, says Giraudeau.
“We have stock to suit everyone, from professional trainees on campus to contractors and engineers looking for a home away from home while on contract at one of the large factories,” she says.
”We also cater for people who relocate from other areas in KZN or Gauteng looking for a quiet family town to settle in and for retirees who are after a lifestyle close to the ocean.”
Rental demand for properties in holiday areas along the Hibiscus Coast is also in high demand. Giraudeau says the average price ranges for rentals here start at around R2 500 per month for a one bedroom flat in Hibberdene to R18 000 per month for a four bedroom house in Umtentweni.
The highest demand is for two and three bedroom, pet-friendly apartments and complexes in the R5 000 to R9 000 per month price bracket and demand for freestanding homes priced between R8 000 to R10 000 per month is also high.
Rentals in the large CBD areas are more affordable than the listings in the exclusive residential areas. People want to be near a CBD for work, but don’t necessarily want to live in these areas, as they are looking for a more relaxed and safer environment.
Therefore the demand in the solely residential areas is priced higher as greater demand equals less supply.
6. Amanzimtoti
Due to the economic boost this town is predicted to receive when building of the KZN Automotive Supplier Park (ASP) in Illovo commences later in 2020, the rental market here is expected to become a hotspot.
Gavin Parkins from Seeff says once completed this 1 000ha project is anticipated to create more than 25 000 new jobs and also the construction of thousands of new affordable homes.
“Over a five year period it is anticipated that thousands of families will relocate here from areas where automotive suppliers are currently situated. This huge influx will cause demand for rental units to skyrocket.”
Parkins adds that investors should turn their focus to areas like Kingsburgh, Warner Beach, Doonside, Amanzimtoti, Illovo and Winklespruit - the residential suburbs closest to the expected ASP development.
“These areas have limited supply, with very limited residential development having been undertaken in the local area over the past 10 years.
Parkins says there is a huge demand for modern, upmarket units for rental in Amanzimtoti. “Generally the buildings here are old and in need of upgrades. Savvy developers could see this as an opportunity to build such complexes and provide these as still affordable rental opportunities for the increasing demand within the Amanzimtoti rental market.”
7. Richards Bay
The rental landscape in Richards Bay has grown substantially over the years due to the influx of people finding job opportunities as well as those moving out of townships and settling in the urbanised areas. In addition to the appealing coastal living, millennials and first-time renters have found Richards Bay the perfect place to start their property journeys.
With this rental market landlords are also more open to negotiation, resulting in stable rental prices.
Seeff's Elaine Chetty says there is a continuous influx of people owing to better work opportunities. “These clients choose to rent a property before considering buying. We have also seen a great demand for sectional titles in the area and 75% of the properties that we rent out are this property type - security being the primary reason and pricing an additional benefit.”
Rentals vary from R5 000 to R40 000 per month, depending on the tenants’ needs. A flatlet away from the CBD will attract a rental of around R5 000 a month, and two to three-bedroom sectional title units fetch monthly rentals of between R6 000 to R10 000.
A two to three bedroom freestanding property will fetch R8 000 to R12 000 a month, depending on location and property offerings.
“The more upmarket townhouses and freestanding properties are being let for between R11 000 to R20 000 a month, while properties in the luxurious Waterfront achieve rentals of around R20 000 to R40 000 a month,” says Chetty.
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