Demand for rental accommodation at Century City is outstripping supply and has resulted in a 15% to 20% growth in rentals in the past year, says Rob Downey, manager of Property World, the official on-site agency.
He said they currently had around 170 rental properties on their books and a waiting list of would-be tenants with the strongest demand being for one and two bedroom units.
Rentals, he said, had risen by around R1 000 per unit in the past year with one bedroom units now letting for R5 000 to R5 500 per month and two bedroom units for between R6 000 and R6 500.
“With one bedroom units selling for around R800 000 to R850 000 and two bedroom units averaging around R1,3million achievable rentals are offering a good return on investment, particularly the one bedroom units which are getting in excess of 6%.”
Downey said there were a number of factors contributing to the shortage of rental stock.
“Firstly speculative investors have not been hugely present in the market in recent years with most of our buyers in the past two to three years having been owner occupiers.
“Secondly Century City has grown in stature and popularity due in the main to its central location, its high standards of safety and security and the phenomenal lifestyle it offers with a wide array of world class amenities literally on one’s doorstep.
“In addition, the National Credit Act coupled with stricter lending criteria by the banks has made purchasing property much more difficult and out of the reach of many young professionals who previously would have qualified for a bond.
“Furthermore, tenants are attracting to Century City due to the fact that the developments are modern, clean and well maintained.”
Downey said they had no doubt the higher achievable rentals would see investors returning to the market in the short to medium term.
Commenting on the property market generally, he said while conditions remained tough, there were signs of an improvement and since July they had notched up 36 sales totaling in excess of R81 million and with a number others currently under negotiation.
“We are definitely starting to see an upswing in confidence among purchasers, many of whom have been deliberating for some time before now committing. Their general perception is that the market has bottomed and they need to climb in now to get ahead of the pack.”