RESIDENTIAL
average net rental yield can be 6 % to 8 %. The ungeared return on property ( your capital growth and net rental yield ) is also currently very decent .
The market currently favours buyers with high supply and lower demand . Rental demand is also recovering , with fewer tenants in arrears and rental income growing nicely . So , stay ready , take advantage , and secure those great deals !
Factors fuelling Property price growth
Average property price growth
Property ’ s input costs
From 2003 to 2023 , the average property price growth was 8.3 %, which is significantly higher than the 3.2 % we are currently experiencing .
The prices of construction materials , construction worker labour costs , and land prices , have increased faster over the last decade than property prices , which can also lead to higher future property price growth .
Rental escalations
Interest rates
Rental escalations determine your rental yields on the property , and they are also higher than property price growth in SA , possibly leading to higher property price growth in future .
Although they seem to be very high at the moment , they should start to decline in the near future . This can also have a positive effect on demand and increase property prices .
53 FEB 2024 Real Estate Investor Magazine