Residential Rental Report

Financial pressure caused by the Covid-19 lockdown continues to impact the South African rental market, as the slow deterioration of tenants able to pay their rent on time hits a deep dive.

The steady deterioration of 5.43% over the last 6 years is hardly noticeable in comparison to the overnight drop to 50% in good standing in a single month between March and April, according to rental monitor data from TPN Credit Bureau.

TPN Managing Director Michelle Dickens says breaking down the quarter into monthly analysis helps to predict the short term trend.
It appears that “May could be the lowest point of rent collection at 72% due to the impact of Covid-19, but as per August data expected to end on 73% of tenants in good standing (Currently sitting on 66% with a week of rent collection still left) recovery is still not in sight”.

“Residential eviction orders in Alert Level 3 where being granted with a 5 – 90 day stay on execution once Alert Level 3 ended. That means some landlords who obtained eviction orders in Alert Level 3 now have to wait till 17 November to execute. All the while tenants live rent free,” says Dickens.

“In Alert Level 2 execution of evictions are stayed until the end of the State of National Disaster – which is a moving goal post. Most important, until there are job recoveries, the residential rental market will remain under pressure. Less tenants with no income will mean higher vacancies and lower escalation, if not negative escalation”.