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Landlords and a Rising Rental Demand

 

Due to rising rental demand, property experts are noticing an increase in the number of investors in the buy-to-let market.

Affordability is always a factor when interest rates rise and affordability make it more difficult for prospective buyers to qualify for home loans. First-time home buyers also need to save large amounts to pay for deposits and transfer costs.

These consumers are therefor likely to remain in the rental market instead of buying their own homes.

Rental demand is also boosted by consumers opting to delay the purchase of a home due to economic and employment uncertainties. Homeowners will often-sell their current properties due to financial pressure.

People deciding to rent rather than buy, are not unique to South Africa.Around the world there is a decline in home ownership levels. According to the report from Fitch Ratings, the percentage of homeowners in the US has fallen with 4%, in the UK with 8% and in Australia with 3%.

The supply of rental properties, especially in the major financial centers, is still running well behind demand and that means that rentals are also set to keep rising.

Professionals in the Rental Industry are seeing above-average increases and returns in high-demand areas and this is bound to attract more investors.

In South Africa, buy-to-let investors make up around 10% to 12% of residential property purchases. This percentage will surely increase over the next couple of years.

 

 

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