Residential Rental Monitor 2021 Q2

Double trouble drives gross yields down: Residential property is defying demand and supply principles. We have seen property price increases go from 1,2% to 4,6% in April 2020 (during the hard lockdown), although this has eased to 3,7% in quarter two of this year. The sharp rise in property prices is attributed to lower interest rates, even though volumes are not reflecting the same demand. Added to that, residential property demand, measured in terms of actual property transfers, has been on a decline since the boom periods of 1996 to 2000 and 2002 to 2007, thereafter remaining relatively flat with a noticeable drop in 2020. Investment and rental properties are however feeling the effect of higher house prices and lower rental escalations, coupled with dramatic increases in rates and taxes. Gross yields continue to shrink and the national average is currently at 10,3%.