This is according to the latest Rode’s Report on the SA Property Market. Cape Town’s super rental growth since 2015 echoes the superior growth house prices have been showing in the Mother City.
Over the past year, Durban has shown the strongest year-on-year growth (+7%) in flat rentals, compared with Pretoria and Johannesburg that recorded a 6% growth.
“We predict overall that the national growth average of 5% reflects a muted economic growth that is expected to continue,” says Rode. “The affordability factor comes strongly into play and is mirrored in the financial strain households are experiencing along with modest growth in salaries.”
In July 2017, nominal disposable salaries (as measured by the BankservAfrica Disposable Salary Index, or BDSI) were up by a yearly rate of 7%, but against this – in real consumer-price deflated terms – growth of only 2% was recorded.
While flat vacancy rates in the main metro areas of Durban (at 7%) and Johannesburg (at 15%) are relatively high, those in Pretoria (at 2%) and Cape Town (at 3%) are low, enabling national vacancy rates to remain at just below 5%.
Commenting on this, Rode notes: “This is what makes residential property different from office buildings; the vacancy risk is lower, especially in flat blocks that lie outside areas suffering from urban blight.”