The demand for rental properties in the high-end of Cape Town has significantly increased.
Also read: Cape Town has South Africa’s highest property price index – StatsSA
Among some of the reasons for this are the higher interest rate, semigration (semi-emigration) from Johannesburg and Durban, as well as tourism, and the return to the office, colleges and universities, says Ross Levin, licensee for Seeff Atlantic Seaboard and City Bowl. ‘The higher interest rate has boosted the demand for rentals even at the top end, but largely only in Cape Town where semigration is a big driver of the rising demand for rental accommodation.’
As per Seeff data, the demand for high-end rentals has skyrocketed from between R25 000 and R35 000 to R80 000 and more. Rental prices in the Southern Suburbs are averaging around R22 000.
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Noteworthy leases include a rental property in Bantry Bay that was recently closed on for R130 000 per month, as well as a monthly deal for a Waterfront rental at R120 000. In just 24 hours, non-principal property practitioner Christine Ireland had received 60 enquiries for family homes ranging between R40 000 and R50 000.
Levin says that rental yields in the Atlantic Seaboard and City Bowl generally hover around 4% to 6%, depending on the property. Furthermore, luxury developments such as Alphen Glen on the border of Constantia offer rental yields of 6.8%.
New developments such as The Hub in Woodstock could deliver rental yields of about 7%. Conversely, Andrew Collins, the rental manager for Seeff Southern Suburbs, says popular areas such as Woodstock, the Southern Suburbs, Hout Bay, and Llandudno present a severe stock shortage, adding that low and medium-priced properties (around R10 000 to R35 000 per month) are in high demand.
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