NC’s rental rates grow the fastest

2018-05-02 06:01

The Northern Cape recorded the fastest-growing monthly rental rates.

The province’s average residential rental prices grew the fastest as compared to other provinces between 2010 and 2016.

In 2010, the average monthly residential rate in the province was R3 803.

That rose to R7 119 in 2017, or by 87%.

These findings are featured in the 2018 South Africa Survey, published by the South African Institute of Race Relations (IRR).

Among the notable facts are that the Northern Cape had the third cheapest rental rates in 2010.

By 2017, rental rates had grown to the extent that the province had become the second most expensive after the Western Cape.

The survey further states that rental rates in the province were above the national average of R6 377 in 2017.

The Northern Cape and the Western Cape were the only two provinces with average monthly rental rates in excess of R7 000, with Gauteng being rated the third highest rental rates, with a 40% share of renting households in the country.

IRR analyst Kerwin Lebone revealed that the Northern Cape’s leap in rental prices is phenomenal since the proportion of households in the province that rent accommodation is the lowest in the country, at 1.4%.

According to Lebone, the Western Cape’s comparatively high residential rentals can be explained by the province’s relatively successful economic performance and, as a result, its high rate of in-migration.

In addition she stated that the province has earned a global reputation as a premium tourist destination that attracts wealthy clientele.

“Data on the Northern Cape – from population growth and in-migration to housing demand indicators, suggests that the pace at which rental rates are growing is unlikely to be driven by the usual factors affecting rental prices in the country,” said Lebone.

She added that the most plausible explanation could be the construction of the Square Kilometre Array (SKA) in the Northern Cape, a collaborative international project that began in 2014 and is due to run until 2030.

Lebone believes this may have enabled residents to increase rental prices to above-market rates for international tenants.

“This underscores the importance of external capital injection into local, depressed economies.”

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