The latest data from TPN show that the rental market is still under pressure.
Almost 9% of tenants are not paying their rent at all, while 14% are paying late.
More than 11% of properties are now standing empty and rent in the Western Cape is lower than a year ago.
The pandemic, lockdown and retrenchments have wreaked havoc on tenants’ ability to pay rent in South Africa.
According to new data from Tenant Profile Network (TPN), the largest credit bureau that tracks tenant payment behaviour in SA,
Only 60.74% of tenants paid on time in the third quarter, up only slightly from the second quarter’s 59.48%.
but still down from almost 65% in the first quarter.
Almost 9% of tenants are not paying their rent at all, while 14% are paying late. Those making partial payments
continued to increase, from 15.28% to 16.49% over the past two quarters.
The weakest performing tenants were those in the cheapest and priciest segments. Only 61% of tenants in properties with rent
of less than R3,000 a month were in good standing (they paid on time or late, or partially, by agreement with their landlords).
In the second quarter of the year, only 60% of tenants who paid more than R25,000 in rent were in
good standing, but this improved to almost 71% in the third quarter.
The most exemplary tenants were in the R7,000 to R12,000/month rental segment ,where 81% were in good standing in
Tenants Profile Network.
The TPN data show that the Western Cape became the first region to move into “rental deflation” in South Africa
its average residential rent for the third quarter of this year was 0.62% lower than a year ago.
This is the first quarter of rental deflation in the province since records began five years ago.
Across the country, average rent was still 0.65% higher than a year ago.
As recently as in the first quarter of the year, rent was almost 3% up from a year earlier.
Properties with rent of more than R12,000 a month were worst affected, with rent almost 2% lower than a year ago.
TPN says the pressure on rent can be explained by an increasing supply of rental space relative to demand.
In the first quarter of the year, fewer than 7.5% of residential properties were vacant
but this has increased to 11.4% in the third quarter.