Agents and landlords did not foresee the drop in demand for property in the first-quarter of 2019. This is according to the FNB Estate Agents Survey results.
Certified residential and letting specialist Grant Rey offers some perspective into property letting and some of the challenges faced by landlords.
He says landlords are experiencing some pressure from tenants, with others threatening to move out if rent is not reduced.
Rey highlighted some factors.
We experienced phenomenal growth post-2014 in the property market.— Grant Rey, Certified residential and letting specialist - Re/Max
There were a lot of people moving to Cape Town. The demand was there but the supply was low. We had people queuing outside properties and now we're taking tenants one by one.— Grant Rey, Certified residential and letting specialist - Re/Max
Rey describes another factor as "the Airbnb bubble", where people were taking up properties and putting them on the Airbnb App. But now it seems the market is saturated.
He says it is becoming difficult to let property with or without an agent.
I see a lot of landlords putting their property on social media hoping to get the right tenant within their circles or get connected.— Grant Rey, Certified residential and letting specialist - Re/Max
As a tenant if you don't want to sit vacant you have to win the price war. A tenant goes on social media platform and look at the property portal, puts in search criteria in the order of lowest to highest and if you are not in the lowest five percent, you're simply going to sit empty.— Grant Rey, Certified residential and letting specialist - Re/Max
According to Rey, owners who recently bought properties will be under pressure the most, particularly those in new developments. This is because they won't be able to reduce the prices for tenants, with the hope to make profit.
To hear the rest of the conversation, listen below:
This article first appeared on CapeTalk : Cost of Cape Town's rental property ‘coming under pressure’