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Residential Rental Market are still pressured by a weak economy and low interest rates- the result being further slowing in CPI Rental inflation in the September CPI.
Unlike the strong Home Buying Market, the Rental Market still languishes in the doldrums.
The September release of the CPI (Consumer Price Index) inflation data gave confirmation of ongoing residential rental market weakness, with the CPI for Residential Rentals seeing its year-on-year inflation rate slow further from 1.8% in the June CPI survey to a lowly 1.4%. This continues a slowing trend from a multi-year high of 5.7% back in 2017.
The ongoing slowdown in rental inflation is reflective of weakening rental market fundamentals that have been witnessed in various other rental market data such as TPN’s vacancy rate data showing a national increase in vacancies, and in its tenant payment performance data which has shown a multi year weakening.
A long run stagnation in economic growth in SA has gradually applied greater financial pressure to the tenant population, ad thus its ability to pay rent, with the COVID-19 lockdown period greatly intensifying this pressure.
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