The Pretoria and Centurion rental markets are booming as it picks up the slack from the sales market which has shown a notable decline in transfers over the last two years. According to agents from the Seeff Property Group the high interest rate continues to impede sales volumes which have largely now settled back down to below pre-pandemic levels.
Data from the TPN show that Gauteng has the highest number of tenants with almost 4 out of every 10 households (37.8%) renting. The province also enjoys the highest volume of inward migration as people flock to the metros in search of economic opportunities.
Pretoria has a bustling public and private economy which contributes to the demand for rentals. As the seat of government and administrative capital, this translates to a strong presence of government departments, embassies, and parastatals (state-owned enterprises) that fuel economic as well as property market activity.
Many government officials and foreign delegates live in the Pretoria East area. PG van der Linde, rentals manager for Seeff Pretoria East says rental properties are now in high demand and have been for the past year. Seeff expects the market to only start slowly slightly after the expected interest rate reductions later this year, but nothing too severe. He expects a stable rental market with good year-on-year growth for this year predicted.
People rent for a variety of reasons in the Pretoria East area, not just for financial reasons. The rental market is varied, attracting families with its good schools and safe neighbourhoods. Young professionals and students are also drawn to the area’s affordability and convenient access to job centres and universities.
Van der Linde says the Pretoria East area covers a diverse range of suburbs with varying price points for tenants. The University of Pretoria and UNISA in the area, are also contributors to the demand for rentals.
Despite being home to the most expensive suburbs in the capital, the most active price band in the Pretoria East rental market is R12,000 per month, ranging to about to R25,000 for family houses.
Upper end luxury homes do reach much higher rentals, especially in estates such as Woodhill Golf Estate where rentals are paid of up to R55,000 to R79,300 per month. Rentals in the luxury suburbs such as Waterkloof and Mooikloof can reach R50,000 per month.
A buoyant rental market also presents opportunities for potential rental investors who can capitalise on investing in the current flat prices of properties and earn good returns. One area with good rental prospects is Centurion, according to Tiaan Pretorius, manager for Seeff Centurion.
The area offers many different suburbs and is popular with families and professionals alike. The busiest sector of the market tends to be for rentals between R9,000 to R15,000, but there is also good demand for higher priced rentals.
The mid-market tends to always be the best to look at for rental investors, especially suburbs such as Die Hoewes where you can invest in a two or three-bedroomed townhouse with good rental income and a positive rental yield of up to 10%, depending on the property. Midstream estate is another good choice for rental investments. He cautions though that landlords must first investigate the potential rental income and yield before leaping into the investment, as conditions differ depending on the complex, location, property specifications and so on.
