forecast , and you must remember that house prices can also fall . If capital growth is important to you , consider the region , town and type of property that you buy . Historical house price trends may be an indicator of future performance , so you may want to inform your decision regarding property location by reviewing regional trend data .”
“ An experienced agent who is active in the area you are considering is essential to the process of evaluation ,” adds Xotongo . “ They should be able to advise you on current average rentals and historical purchase prices for comparable properties .”
What is the current state of the rental market ?
According to the PayProp Rental Index 2022 Q2 , “ rental growth of 2.5 %, 2.6 % and 2.7 % in April , May and June respectively . The upward trend seen since April 2021 , although very gradual , remains encouraging ”. And the national vacancy rate has had a sharp decline from 13.31 % to 8.26 % ( TPN Vacancy Survey 2022 Q1 ). However , this is still above the pre-pandemic low of 7.47 % achieved in Q1 2022 . PayProp also reports that the percentage of tenants in arrears is lower than it was in 2020 ( 24.9 %) but has increased marginally from 18.4 % to 18.5 % in the last quarter .
Does that mean it ’ s a good time to invest ?
“ As a landlord , you need to know your location , your tenants and , crucially , your likely returns .” That said , the macro pressures of rising interest rates and the everincreasing cost of living as a result of inflation have resulted in many first-time home buyers feeling the pinch , and purchasing activity in this segment has waned . “ Those who might have been considering buying , are now opting or being forced to rent . Increased demand is good for the rental market ,” says Xotongo .
SA Real Estate Investor Magazine OCT 2022 61