As consumers buckle under increased financial pressure, many are choosing predictability rather than residential property market investment opportunities. There is an increased demand for residential rental property with the national vacancy rate – the number of residential rental properties standing vacant – dropping to levels last seen in 2017. Overall, vacancies decreased 37.61% between 2021 and 2022, even taking a market adjustment after the hard lockdown in 2020 into account. The residential rental market continued to see positive signs of growth in the first quarter of 2023 with the national vacancy rate at 6.19%, down from 8.13% in the fourth quarter of 2022. This recovery trend is expected to continue in 2023, but at a slower pace.
The Western Cape leads the market with the highest TPN Market Strength Index and the lowest vacancy rate of all provinces. Although improved demand for rental accommodation is driving vacancies down nationally, high unemployment and a poor economic climate could result in more consumers in financial distress, with current demand likely to slow down as high inflation and interest rates absorb the disposable income of households.
