PROPERTY: Rentals, Could Atlantic Seaboard Top End Hit R200 000/month Soon?
Recent Western Cape Business News
CONSIDERING that Zimbali (KZN, Dolphin Coast) has hit R100 000/month and the Atlantic Seaboard is already at around R170 000/month, then the R200 000/month mark does not seem too farfetched.
The latest FNB Property Barometer once again points to the Atlantic Seaboard and City Bowl as being the strongest property markets in the country and while inevitably slower, given the economic climate, it still outpaces the economic powerhouse of Gauteng and inflation by some margin.
The barometer notes that as at the second quarter of 2017, the Atlantic Seaboard average house price inflation rate stands at a phenomenal 29.9% year-on-year and the City Bowl at 21.1%.
Samuel Seeff, chairman, Seeff Property Group says that there can be little doubt that as with the sales sector, the rentals sector of the Cape metro remains the strongest performer in the country. Recent reports from TPN have also pointed to the Cape as having the strongest rentals market, generally with the best paying tenants, this, despite the premium that Cape property now commands, including a rental premium of up to 20% and more depending on the area.
Where R80 000/month seemed a high rental just two years ago, we are now seeing top end properties in Clifton are commanding rate of up to R150 000-R170 000. Whether these will be sustainable is questionable as Dinis Martins, COO for Seeff Atlantic Seaboard and City Bowl says that it is likely that top end rates will come under increasing pressure. So, while you will get the odd rental at this rate, it is not going to be the norm in a weak economic climate.
The Atlantic Seaboard is home to the country’s most expensive rental markets, both for long and short term with the highest average rates paid here. The fabulous location, beaches and facilities combined with the limited property stock being part of the attraction.
Karyn Farrell, Rental Admin Manager for Seeff Atlantic Seaboard and City Bowl says the top suburbs in terms of commanding the highest monthly rentals are Clifton, Bantry Bay, Fresnaye and the V and A Waterfront, but Camps Bay is also highly rates. The highest rentals here are R80 000/month at the Waterfront, R170 000/month in Bantry Bay/Fresnaye and R150 000/month in Clifton.
While the most popular rental range is between R25 000-R40 000/month, rentals even in Mouille Point can now reach R100 000/month and more. At the V and A Waterfront, you can rent an opulent 504sqm penthouse for R170 000/month. Current escalation rates stand at around 8% on average while landlords are achieving yields/ROI of around 4% on average, but this varies according to the property and location. The more expensive the property, the lower the rate tends to be simply because top end rates are under pressure.
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