PROPERTY: Top-End Rentals Continue To Perform
Recent Western Cape Business News
The rental market continues to perform beyond expectations in the Western Cape. So says Pam Golding Properties’ rental manager for the Cape metro region, Dexter Leite, who reported ongoing high levels of activity from November 2009 to February 2010. Leite’s division concluded over 650 leases in this period – almost all of them long-term. The total lease value was in excess of R40 million, including a number of high-end deals in the Southern Suburbs of Cape Town and along the Atlantic Seaboard. Leite says this top-end activity certainly contributed to the months of January and February 2010 being the most successful of the entire financial year (ending February 2010).
“January and February are traditionally high turnover months in the rental market,” says Leite, “and this year has proved to be no exception. Whilst the noteworthy deals being struck for luxury homes made a substantial contribution, it was also significant that there was sustained demand across the lower price brackets too, and across most areas of Cape Town – not just those renowned for trophy properties. Nevertheless, we have certainly entrenched our position as market-leaders in the top-end rental market, and are able to advise both lessors and lessees through some very complicated lease negotiations, thanks to the experience and skills of our team.”
PGP’s MD for the Western Cape Metro region, Laurie Wener, says the results for the period November 2009-February 2010 seem to fly in the face of some analysts’ assessments of the market. “Whilst some industry commentators have been painting a gloomy picture of the rental market in recent months,” she says, “this has not been our experience – in fact, we are seeing growth in the market. We believe this is a natural consequence of the fact that mortgage finance is still difficult to obtain, despite the fact that some financial institutions have begun easing their lending policies again. It is still difficult for lower-income earners and particularly self-employed individuals to obtain home loans, and this naturally drives more would-be home-owners into the rental market. Banks are also still hesitant to grant mortgage finance in areas which they consider to be high risk.”
Leite adds that there may be some impact on segments of the rental market due to the forthcoming electricity price hikes. “We anticipate that it will result in downscaling by some tenants, especially those that are already financially stretched,” he says.
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