A recent report by the TPN Credit Bureau highlights that rental payments remain a high priority for tenants in South Africa, despite the economic challenges they may face.
During the second quarter of 2022, the TPN Residential Rental Monitor indicated that there are concerns about the state of the property market, which is balancing a fine line between demand shifts and the ability of consumers to rent any formal accommodation.
This is the third increase in the main repo rate by the South African Reserve Bank (SARB) since the South African Reserve Bank (SARB) announced its intention to drive inflation back to its targets in September 2022.
Despite the fact that residential property sales are expected to slow, prices are expected to rise as well in some areas as demand for well-serviced areas remains an attractive asset, according to TPN.
While there are economic challenges in the world today, tenants are still paying their monthly rental obligations in good standing.
According to TPN, the household budget credit priority of consumers is monthly rental payments, second only to mortgage or bond repayments in importance for a household budget.
This number improved from 80.78% in the first six months of the year to 82.22% in the second quarter.
When broken down into the different categories of tenants, the credit bureau has stated that there has been a noticeable decline in good standing in the rental bracket above R25,000 which has dropped to 77.38%.
The credit bureau added, “The rental bracket of this category typically experiences a drop in the second quarter of every year — with the exception of the second quarter in 2019, 2020 and 2021 — but it then strengthens again in the third quarter.”
Despite the economic downturn, the rental brackets from R12,000 to R25,000 have recorded the highest good standing ever, with an impressive 87% having no rent arrears.
A staggering 88% of tenants paying between R7,000 and R12,000 are on time with their rental payments, exceeding pre-pandemic levels in 2018 and 2019.