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Why buy-to-let properties could become more enticing

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Cape Town - There are indications that rental inflation could noticeably be outpacing weak house price inflation, making buy-to-let properties an attractive buying opportunity, according to John Loos, household and property sector strategist at FNB.

In the third quarter of 2016, the revised FNB-TPN National Average Gross Residential Yield declined very slightly from the previous quarter’s average, after having risen in the second quarter.

"While we didn’t see a further rise in the average gross yield on residential properties in the third quarter of 2016, the fourth quarter house price growth slowdown suggests that house price growth in that quarter began to noticeably underperform various estimates for rentals. This could be pointing to rental inflation perhaps nearer to 5%," Loos said on Tuesday.

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