Young South Africans prefer renting over buying as the rental market soars
Like young professionals the world over, new comers to real estate are looking for convenience, amenities and flexibility, rather than first-time home ownership. As a result, demand for rentals is growing and the market is at its busiest since 2018, according to Murray Haywood, Tyson Properties’ director for Gauteng and KwaZulu-Natal and national group rental manager.
“We are seeing more and more people choosing to rent and not buy. The factors influencing this extend beyond the daunting costs of running a house or the consistent expense of maintenance. The younger generation wants to be fluid and follow careers rather than be bogged down by bricks and mortar. They put spare funds into financial investments which are more liquid,” he says.
Unsurprisingly, Gauteng, South Africa’s economic hub and repository of jobs in corporates, finance and technology, is the most vibrant rental market. Suburbs such as Sandton and Rosebank with trendy apartments, proximity to top schools, shopping centres and good transport links are the major drawcards.
“The ‘rental’ asset class is growing nationally. Agencies like Tyson Properties, are making a concerted effort to set up rental books and establish rental portfolios within their franchise networks.
"We use credible entities establishing easy and up to date lease agreements, do thorough background credit checks and are now consistently training our agents so that they know what to look for when renting a property and what questions to ask,” Haywood continues.
Although popular for different reasons - natural beauty, sophisticated lifestyle, tourism and expanding tech and creative sectors – Cape Town and Gauteng are both in high demand for rental housing.
Tyson Properties’ rental manager in Cape Town, Southern Suburbs, Stephen Adamo, notes that areas such as Bishopscourt, Constantia and Newlands (all southern suburbs) are drawing attention from renters.
“The advantages of renting in these areas vary. Often, we have clients who are moving from upcountry or relocating to South Africa for the first time from another country. Renting allows these clients to understand the areas better before settling down and buying a property.
“For those looking to rent larger properties, renting a R15m plus property tends to work out less expensive than purchasing. Here, rental allows more flexibility, especially if you need to be closer to educational institutions, work, beaches or your individual lifestyle choices,” he says.
Even among locals, he points out that the rental market in Cape Town and the Southern Suburbs is also growing for a myriad reasons – including access to basic services such as electricity, water and transport, security, privacy and proximity to top schools and places of work.
“There are also still a few properties in the Southern Suburbs that provide clients with an abundance of space without compromising on location or accessibility. The market is growing year on year with an 8 to 10% escalation in rentals per year,” Adamo adds.
Those on the lookout for properties to rent can expect increased demand for high-end apartments in city centres as well as very competitive rental prices in desirable areas. Decisions need to be made quickly due to high demand and having the right paperwork on hand will get you over the line ahead of others.
10 tips for renters
Do your research – Understand the rental market in your chosen area as well as each particular neighbourhood. Make sure that you know average pricing and what is expected for extra amenities and services.
Prep the paperwork – Get pre-approved by supplying the agent with the necessary supporting documentation: payslips, ID, proof of residence and bank statements which are used in the vetting process. Check the lease agreement and make sure that all terms are clear before signing.
Inspect the property – Identify maintenance issues and document them ahead of signing up or moving in. Complete a move in inspection report or ‘snag list’ of items that need to be rectified by the landlord. If repairs are unlikely, document any issues so that, when exiting, you are not liable for damages.
Know your rights and responsibilities – Familiarise yourself with the Rental Housing Act.
Affordability is key, so know your budget – Renting a property not only includes the rental itself but also running costs, utilities, deposits and other fees.
Make sure you can meet upfront costs – Your deposit, equivalent to a month’s rental, needs to be paid upfront. You may also need to cover application and administration fees, as well as moving costs.
Keep everything in writing – Keep records of agreements with the landlord as well as all correspondence.
Understand maintenance responsibilities – Know what falls on you versus what the landlord is responsible for.
Be a good tenant – Pay your rent on time and follow building rules.
Have a backup plan – In case of unexpected expenses or job changes.