Areas and Places

Cape Town's higher price bracket rentals in demand

The outdoor entertainment and lounge areas of a spacious pet-friendly three bedroom townhouse in a secure complex in Oranjezicht that has 170m2 of floor area, and is within walking distance of De Waal Park and major schools.

While a recent Tenant Profile Network report (December 2015) mentions that the rental bracket above R25 000 in South Africa is a difficult market to be in, in the sense that only 55% (one in two tenants) in this price segment pay rent on time, Cathy Cockroft of IHPC estate agents says that, with IHPC being a German based company with strong connections to the European community in CT and abroad, her experience of this market in Cape Town is very different.

Leases for residential property that she has signed up in the last two quarters have been predominantly in this price category, with rentals ranging from R14 000 (for a one bedroom apartment) per month to R45 000 (for a three bedroom apartment) per month in the City Bowl and Atlantic Seaboard areas.

“There was a lull in activity in November and December in the long term residential rental market, possibly due to many landlords renting their properties out as short term accommodation, which created a shortage. In the last two months, there has been a surge in demand for good properties to rent long term and as fast as we can sign up new properties that are priced correctly to rent, we can sign up a tenant,” said Cockcroft. “While short term letting is sometimes tempting (from the landlord’s point of view), long term rentals are more stable and financially viable.”

There is currently a huge demand for properties to rent with up to 70% of her clients being foreigners. She has had a British client who paid the two-month security deposit plus the full amount for the year’s lease for a high end property to rent on the Atlantic Seaboard, as part of their relocation “package”, and another from Brazil paying six month’s rent in advance.

IHPC are dealing with prospective tenants from Germany, UK, France, USA, as well as Durban and Gauteng, with the bulk of these being at a senior management level, she said.

“It is usually a third of a person’s income that goes to rental (from an affordability perspective) and if a person is prepared to pay around R20 000 to R30 000 on rent each month, you know they are fairly financially secure,” said Cockcroft”.

Examples of properties she has on her books to rent at present are:

· a spacious pet-friendly three bedroom townhouse in a secure complex in Oranjezicht, that has 170m2 of floor area and is within walking distance of De Waal Park and major schools;

· a furnished two bedroom 90m2 apartment in Mouille Point, which has been tastefully renovated and has views of the ocean, mountains and the Green Point Stadium, and is within walking distance to the V&A Waterfront; and

· a furnished two bedroom apartment in Camps Bay, with 75m2 of floor space with views of the Camps Bay beaches, Twelve Apostles and Lion’s Head.

“Touch wood,” said Cockcroft, “we have never had problematic clients who did not pay their rent in full and on time. When dealing with tenants who are in the higher professional profile, they tend to be very specific in what they want and will be very decisive when presented with potential properties to rent. Homes with good security in central areas with secure parking tend to be snapped up very quickly.”