Rentals plunge for posh homes

The top end of the residential letting market, with monthly rentals of R12 000 a month or more, is showing signs of financial distress.

Payment trends deteriorated significantly in this rental bracket in the fourth quarter of last year, with the number of tenants who made no payment towards their monthly rental increasing to 21 percent from 12 percent in the previous quarter, according to the latest rental payment monitor compiled by TPN Credit Bureau.

In addition, the percentage of tenants in good standing in the R12 000 plus rental bracket decreased by 8 percentage points to 64 percent between the third and fourth quarters.

TPN considers tenants to be in good standing if their rental is paid on time or even on the last day of the month.

It said data from the past two and a half years showed the payment behaviour of tenants in the R3 000 to R7 000 bracket continued to perform the best. On average, 82 percent of tenants in this rental bracket were in good standing, with 71 percent of them paying on time.

Tenants who did not make any payment towards their rental were lowest in the R3 000 to R7 000 a month rental bracket at 11 percent. The figure was 14 percent in the under R3 000 monthly rental bracket and 14 percent in the R7 000 to R12 000 bracket.

Business Report

Posted at 09:23AM Feb 04, 2010 by Editor in Residential  |