Latest Vacancy Survey is not a cause for panic

Latest Vacancy Survey suggests the rental environment is a tenant’s market. However, with the right strategists, it should not be a significant concern for your property portfolio.

The Tenant Profile Network (TPN) released their latest vacancy survey last month. GRAPHIC: Amber Dawson.

National vacancy rates for residential property are now at 13.15%, says the latest Tenant Profile Network (TPN) Vacancy Survey. This is a 0.24% point increase from the quarter four report of 2020, with this credit bureau not releasing data for the first quarter of 2021.

“It’s a tenant’s market, an oversupply of vacant properties is driving down rental prices as tenants are in the position to shop around for a better deal,” said Michelle Dickens, CEO of TPN.

Although Karen Grobler, IGrow Rental’s national manager, agrees that some residential areas are seeing supply outweigh demand, she is confident that her company has performed well in this environment.

“We have had to put our heads together and get creative to ensure the properties are rented out,” she said.

“With the support we have from a marketing perspective, an investor can be comfortable with Igrow Rentals driving this rental process.”

Figures at a provincial level

The report also provided detail on the state of the rental market for the Western Cape and Gauteng.

In the Western Cape, the vacancy rate stood at 14.4%. This is a substantial rise from the 8.98% rise seen at the end of 2020.

Cape Town, effectively the City Bowel area, had an impact on this figure after seeing its vacancy rate rise to 28.8%. By contrast, the Northern Suburbs, which accommodates the majority of IGrow Wealth Investment’s buy-to-let property developments in the Western Cape, registered the lowest vacancy rate in the province at 5%.

The Northern Suburbs and the Cape Winelands, scored the lowest vacancy levels in the Western Cape. GRAPH: Tenant Profile Network.

“The Cape Town story is a double whammy of increased supply caused by converting short-term holiday rentals into long-term lets and work-from-home opportunities which allow tenants to relocate to the more affordable northern suburbs,” said Dickens.

In Gauteng, the vacancy rate of 12.4% was below the national average. Moreover, it decreased from the 14.66% rate it registered in the previous report.

Similarly, Centurion and Ekurhuleni, which host the majority of IGrow Wealth Investments’ developments in Gauteng, scored some of the lowest rates in the area at 4.8% and 9.1% respectively.

Centurion and Tshwane in Pretoria entertained the lowest vacancy levels in Gauteng by some distance. In particular, IGrow Wealth Investments has a strong presence in Centurion. GRAPH: Tenant Profile Network.

For Grobler, this is no fluke for IGrow Wealth Investments. Rather, it is a sign that they know how to read and react to the current market by constantly collecting and interpreting data. 

“We are constantly collecting vital data. Property is not a guessing game, we work on facts and strategise according to those facts,” she explained.

Vacancy Survey – Residential and commercial property

Notably, Sandton had the highest vacancy rate in Gauteng at 26.7%.

“The impact of office-to-residential conversions, with large lease-up portfolios of quality new units with enticing incentives, [is] putting pressure on this area,” Dickens explained.

Grobler elaborated on this observation by stating that residential buy-to-let property investment “is the way to go.”

“We will always need a roof over our head, that need will not go away. So if you can supply that need at an affordable rate it would make sense in the long-term to invest in residential property,” she said.

Going solo

The survey also distinguishes between the input from landlords and estate agents.

Landlords were more pessimistic of the market, reporting a weaker demand and a stronger supply of rental property. They documented vacancy rates at 14.29%, while estate agents remained lower at 9.87%.

One reason for this difference is that estate agents could benefit from foot traffic in their offices and advertising to entice tenants said Dickens. She further explained it could be a possibility that landlords failed to react to the changing rental market quickly enough.

“This begs the question, did landlords react slower to reducing their rent and so bear the bigger brunt of overall vacancies?” she asked.

Grobler said that many estate agencies she’s encountered did not have the necessary skills to vet and approve rental applications.

Landlords had a more pessimistic view of the current rental market than estate agents. According to data from TPN, landlords believe the market is greatly overstocked. GRAPH: Tenant Profile Network. 

“It would be tough to expect a property owner who does not do this as his normal course of business to get this right. In the unfortunate instance of something going wrong during the rental period you will want the support and guidance from a group of professionals who have had the hard knocks already,” she said.

Conversely, IGrow Rentals has the expertise and the rentals to succeed in these situations.

“IGrow rentals has an entire marketing division supporting us. This includes a social media campaign manager, content writer and graphic designers to name a few. We have the budget and skill to reach very far and it shows in our success rate and the volume of property that we deal with on a monthly basis.”

What about IGrow?

If you are struggling to find a tenant for your buy-to-let property portfolio make sure you visit IGrow Rentals. Even during the Covid-19 pandemic, they aim to provide you with the best tenants in the market. Every month IGrow Rentals receive over 350 applicants for your properties, but only 100 of these are converted into rentals.

In a recent PayProp awards evening, IGrow Rentals came third overall in the country for “exceptional overall performance”. This award was based upon the highest aggregate score across tenure, growth, processing volume, and ecosystem usage. Needless to say, you’ll be in safe hands with Grobler’s team of experts. 


Clearwater Village

Benoni, Gauteng

priced from R799 000

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