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Rent or buy? Residential property market shifts as rate hikes continue | Business

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Property data shows a shift in the local housing market as rising interest rates are impacting affordability and, therefore, forcing more prospective homeowners to opt for renting instead. | News24_Business

It shows the rental market has continued on a gradual recovery path. Rental vacancy rates have slowed from 13% during the pandemic to 7.8% in the third quarter of 2022. However, vacancy rates remain above the pre-pandemic average of 5.3% between 2017 and 2019.

Rental inflation increased by 2.8% year-on-year in the third quarter of 2022, up from what FNB calls"a trough" of 0.6% in the first quarter of 2021. "The pace of [rental] recovery is still constrained by weak employment growth and a rising cost of living. While demand is improving, there is still excess supply in the market. This is reflected by the declining average real rental rate, as well as above-average vacancy rates," states the FNB barometer report.

According to Samuel Seeff, chair of the Seeff Property Group, semigration and a return of tourism have also boosted rental demand.

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