Double trouble drives gross yield down

Residential property is defying demand and supply principles. 

We have seen property price increases go from 1,2% to 4,6% in April 2020 during the hard lockdown, although this has eased to 3,7% in quarter two of this year. The sharp rise in property prices is attributed to lower interest rates, even though volumes are not reflecting the same demand.

Residential property demand, measured in terms of actual property transfers, has been on a decline since the boom periods of 1996 to 2000 and 2002 to 2007, thereafter remaining relatively flat with a noticeable drop in 2020.

Investment and rental properties are feeling the effect of higher house prices and lower rental escalations, coupled with dramatic increases in rates and taxes. Gross yields continue to shrink with the national average currently at 10,3%.

Click here to read the full TPN Residential Rental Monitor 2021 Q2

If you missed the TPN Residential Rental Monitor 2021 Q1, please click here.

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