Luxury rentals seeing a resurgence
Category Industry News
After taking a hit during the Covid-19 pandemic, with an oversupply of stock driving down prices, the luxury rental market is starting to experience something of a resurgence in Cape Town, as people seek out larger properties with office space, with the southern suburbs in particular seeing an upswing in interest.
The pandemic, like with so many other industries, has left its mark on the rental market, but according to The Agency's Kyle Leigh, there are some positive signs taking hold.
"Rental prices have taken a knock, specifically Atlantic Seaboard, and aren't showing the kind of escalation we have seen over the past few years," he admits.
"Certainly, the one-and-two bedrooms, there is an oversupply as the short-term rental market doesn't exist right now, so people have had to put their investment properties and second homes on the long-term market. But while we are seeing prices coming down, landlords that are pricing correctly are finding tenants.
"We are also seeing people wanting bigger spaces, with remote working lending itself to office spaces at home, and there is certainly a nice demand for luxury rentals."
The Agency's Southern Suburbs expert, Elle Hooper, is in agreement, with estate rentals in high demand for a variety of reasons. Covid-19 is again a leading cause of the shift, albeit in a variety of ways, dependent on the income bracket.
"Post-Covid, a lot of home-owners have been forced to sell, due to loss of income, and have themselves become tenants," says Elle. "We are also seeing home-owners renting out their second homes, because even the wealthier clientele cannot have those homes sitting empty, they are not travelling as much as they used to and are being forced to knuckle down a bit.
"Those homes are therefore becoming available to rent - furnished and unfurnished - so you're finding that the upper-level home-owner cannot afford their holiday home to sit empty, while local sellers still want those rentals.
Elle points out that the rental market is still geared towards estate living, with people wanting the security and lock and go aspect of the lifestyle. She also notes that landlords are not able to get the prices of 2-3 years ago, as they are simply not affordable in today's climate, meaning rental values have come down.
But demand is high.
"When a rental comes up, there are a number of interested parties, although they are pushing for reduced rates. We are also seeing people looking to sign long-term leases, with many paying six-to-seven month's up-front to secure the property."
Karina Esterhuizen of The Agency's Atlantic Seaboard rental team also stresses that pricing in the post-Covid climate is paramount.
"Home owners need to be realistic in this current climate," says Karina.
"The market is very saturated at the moment and prices have dropped. It is best to advertise at your asking price or close-to it, if you want to get a tenant in quickly.
In closing, Kelly Wells, of the rental team says that owners need to ensure their properties are ready to view and open to tenants off the bat, with an over-supply of options on the market.
"There is room for negotiation, but you have to go in at a realistic price or you simply won't see any interest at the moment. Ease of access is also key to securing a tenant as there is so much to choose from right now. If the property is not easily available to view and not presentable, the prospective tenant will move on very quickly."
View The Agency's current rental listings here.
Author: The Agency Property Group
