However, tenants have little to celebrate given the Gauteng
High Court’s recent ruling that Eskom be allowed to recover another R10 billion
from customers in the 2021/22 year which means an average tariff percentage
increase of 15.63%. So, any savings in rentals will be sucked into the
electricity tariff increase.
Tenants
feeling financially vulnerable
A recent TPN Tenant Survey conducted at the beginning of
2021 found that 53% of tenants rent because they cannot afford to buy. This figure
was 46% in the same period in 2020. A further five percent of tenants say they
are renting because it is cheaper than owning property.
The fact is that tenants are feeling financially vulnerable.
75% of tenants surveyed reported a loss of income during the lockdown. Nearly
one in ten tenants confirmed a permanent loss of income, while 12% of tenants
received no income for a limited period but are now back to earning their full
salary, and 50% of tenants received only partial pay for a temporary period. Only
25% of tenants confirmed their income was unaffected during lockdown.
At the same time, the TPN Vacancy Survey shows that vacancy
rates are trending upwards to 12.9% as tenants retreat to family and friends to
recover financially.
Although debt became cheaper as the prime interest rate
plummeted to seven percent, with millions of jobs lost and the reality of
temporary or permanent loss of income for millions, consumers are poorer overall.
Property
sales down 20% for 2020
Property sales registered at the deeds office were down 20%
for 2020. The ‘date of sale’ is the date the buyer signs the offer to purchase.
The property is registered in the buyer’s name on the ‘date of registration’
which is typically around four months later. In 2020, 40% less properties were
recorded with a date of sale during the course of the year. However, the four-month
lag between date of sale and date of registration means that in the final
analysis, the number of registered property sales could ultimately increase.
Surprisingly, the deeds office maintained the four-month
average period between the date of sale and the date of registration in 2020
despite it being a year dogged with lockdown and the temporary closure of the
deeds office.
Given the close correlation between the housing market, consumer spending and the state of the economy, the state of the property market is indicative of the current malaise in the economy.
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