25/09/2024
From Daily Maverick email:
"Vacancy rates have climbed across all provinces and rental value bands, says the latest 🏠 TPN Residential Vacancy Survey Report. KwaZulu-Natal and the Eastern Cape have experienced the most significant increases, with double-digit growth.
The report attributes the sharp rise in vacancy rates in the Eastern Cape (up from 9.4% to 12.94%) and KwaZulu-Natal (up from 11.2% to 17.61%) to increased supply and decreased demand.
Gauteng and the Western Cape have seen fewer vacancies, aligning with the national average.
Waldo Marcus, Head of Marketing at TPN, attributes higher vacancy rates to 💹 fluctuating supply and demand, economic pressures and changing consumer behaviour. He says rental vacancies have been steadily increasing since 2018, driven by a growing supply of rental properties. While high interest rates supported the rental market, decreasing consumer and business confidence led to a decline in property supply.
Although the second quarter saw an uptick in vacancies, the first half of 2024 still recorded the lowest average annual national vacancy rate since 2016.
Despite the rising vacancy rate, the TPN Market Strength Index suggests that rental demand continues to outpace supply, even though rental demand showed a slight decline.
Vacancies in the lowest rental value band (R3,000 or less) rose significantly between the first and second quarters, primarily due to reduced student occupancy, unemployment, and workforce migration. Higher rental escalations are expected to further shrink supply here.
For the third consecutive quarter, the 🏘️ luxury rental market was the most resilient, maintaining the lowest vacancy rate across all segments, and experiencing only a slight vacancy increase of 3.57% to 4.52%.
Marcus expects that the recent interest rate cut and improved consumer confidence could lead to increased home ownership, affecting long-term rental supply and demand."
