The Hout Bay residential rentals market offers a vast array of property types, but there is currently a shortage of long term rental properties available and an imbalance has formed, where demand is higher than supply and this might drive up the prices of rentals in the area, says Natasha Gussenhoven, rentals agent at the Hout Bay branch of Knight Frank Residential SA.
What typically happens in Hout Bay is that there are many foreigners who use their properties over the holiday period and then want to rent them out during the winter months, and there are local landlords who also want to capitalise on the short term lets to holidaymakers but want to rent their homes for the remaining six to eight months as normal lets.
The problem with short-term letting is that it is only high intake (and turnover) for a short period of the year and that disrupts the rental cycle that could be achieved with long term tenants. Now there are homes available for the quiet period, but this is not what the tenant base wants – they want a year (at least) to two years of uninterrupted occupation of the unit, with the option to renew if they’d like.
Rentals across all 27 suburbs of Hout Bay can range from R10 000 to over R35 000, but the main demand is in the R10 000 to R20 000 price range. Prices of rentals vary from suburb to suburb in Hout Bay, depending on whether they are sheltered from the wind and sand belt or not, and whether they are independent units or in estates and sectional title schemes. Particularly popular at present are garden cottages, which in many cases offers the tenant the benefits of larger open spaces and swimming pool or private parking without the high cost of the upkeep. Garden cottages can rent for anything between R7 000 to R16 000 (for a two bedroom in a farm-like setting).
Data compiled by economists at Rode & Associates shows that national residential rental inflation averaged 6% last year, while in Cape Town rental inflation was 9.6%, and the rental market in Hout Bay is showing no signs of tapering off. While there is certainly demand, landlords must be careful of overpricing their properties, as this can cause it to sit unlet for months while waiting for a suitable tenant, said Gussenhoven.
Among those moving to Hout Bay and taking up residence in rental properties, instead of buying, are semigrants from Gauteng. Many of these tenants have higher budgets than the “local” market, so tend to choose the upper bracket family homes that can be signed up for long-term leases.
There is, too, high demand for pet-friendly accommodation, but landlords, in general, are reluctant to allow animals on their properties, because of the possibility of damage – but a solution to this could be an inclusion in the lease of the responsibility to repair pet related damage being the tenant’s entirely.
“There are many who are attracted to Hout Bay by the village feel and coastal lifestyle and the fact that it is within easy driving distances of the southern suburbs and Cape Town’s CBD. The benefits here are the beach lifestyle at a fraction of the cost of the Atlantic Seaboard, so demand is unlikely to abate,” said Gussenhoven.