Areas and Places

Affordability gap is widening in KZN South Coast rental market

Kuta Beach in Ramsgate on the KwaZulu-Natal South Coast, where Pam Golding Properties rents out apartments – with three and four bedroom units let for between R6 000 and R8 000 per month.

While the South Coast of KwaZulu-Natal is renowned for its holiday destinations, Pam Golding Properties Margate has seen a remarkable increase in the demand for permanent rental services from landlords, namely property owners in the area, says Dina Porteous, Pam Golding Properties area principal.

She says this could largely be attributable to the affordability and availability of rental stock in the area. A year ago a three bedroom house or apartment could be rented for between R3500 and R5000 per month.

“Unfortunately, over the past year this situation has changed dramatically as the demand for properties and the cost of rates and taxes/ levies has driven rental prices into a price bracket that is just out of reach for 90 percent of the enquiring tenants.”

“Currently, tenants are still demanding rentals in the lower end – between R2500 and R4500 per month – and this is understandable, as salaries on the South Coast are extremely low in comparison with similar employment in larger towns or cities. It is specifically worse in the private sector as most of the businesses on the South Coast are SMME’s and business is seasonal. For some reason the bigger national companies with a footprint in the area seem to remunerate their staff less for the same position compared to the large centres or major metros. The average income of the tenants enquiring about property to rent is between R5000 and R8000 per month.”

Porteous says data from property transfers in the area between Shelly Beach and Southbroom indicates that the majority of pensioners have sold their homes during 2008 and 2012. These pensioners are now looking at renting, however they are also hard hit by the low interest rates on their investments, while living and medical cost are increasing.

“The local average house price of R850 000 and the deposit and transfer cost requirements have fuelled the demand for rentals in the area, especially for SME business owners and public sector employees.”

“Over the past 21 years Pam Golding Properties Margate has been a consistent performer in the rental market and has been extremely fortunate to be in a position to attract the top end of the rental market and good tenants. We are extremely proud of the fact that of our total rental book only less than 0.01percent of tenants are 7-14 days late with their rentals, and landlords receipt their money the same day it clears in the bank.”

“This could mainly due to a hands-on house management system in our office. Just over a year ago we went from using an outsourced rentals system to an in house management system and dedicated well-trained staff. While the migration between the two systems came with its challenges, those are something of the past. Tenants deposits are also individually invested in separate trust accounts as required by the Estate Agency Affairs Act and information contained in these accounts is available at the press of a button.”

Concludes Porteous: “The best advice we can give landlords is that if you have a good tenant in your property, look after them, and use a rental agent that knows their business.”