Second highest rental growth in 2018
Category Newsletter: GM's Message
According to the PayProp Rental Index for Q4 of 2018, KwaZulu-Natal (KZN) achieved the second highest rental growth for Q4 2018, at 7.25%. This marks a good recovery from the low growth seen during 2017.
At the current level - R8,129 - the average rent in this province is the third highest in the country. While we see an increase in KZN tenants' debt-to-income ratio (from 37.9% to 45.6% in Q4 2018), it's encouraging to see the percentage of risky tenants decreasing to 37.7% - although it is still slightly higher than the national average of 36.3%.
The average credit score for the region stayed unchanged at 631 versus the year before, indicating that tenants are still managing their finances responsibly, even with higher levels of debt.
We also saw a slight increase in the rent-to-income ratio to 30.4%, the highest in the country. This makes sense as rentals grew faster than income in the province.
This increase, together with the increase in the debt-to-income ratio, means the affordability ratio increased (worsened) significantly to 76%, up from 65.8% a year before.
All in all a good report for the rentals industry in KZN.
Call our Rental Specialists in Morningside, Umhlanga or Ballito for advice or further property related information.
Author: Etienne Louw