Don't price yourself out of the market

Posted On Monday, 23 August 2004 02:00 Published by eProp Commercial Property News
Rate this item
(0 votes)

Landlords need to be aware of developments trends to avoid pricing themselves out of the market.

Construction IndustryLandlords need to be aware of developments trends to avoid pricing themselves out of the market.

"New stock has a direct local impact on the strength of the letting market in a particular area," comments Neville Schaefer, CEO of Trafalgar, the national residential property group.

He adds that this is clearly illustrated in Johannesburg and Cape Town where there is a lot of new stock coming onto the market and is not being taken up, especially at the asking rentals.

"The demand for rental accommodation at the upper end of the market is generally weak as people are buying instead of renting. As the asking rentals for new stock are decreased by weak holders, tenants move from existing stock to live in new and, perceived, better accommodation. This has the effect of landlords with existing tenants not being able to increase their rentals for fear of their tenant moving to new accommodation."

The opposite is happening in East London and Port Elizabeth where buoyant economic conditions, particularly in the automotive industry, has resulted in a very strong letting market. "Also no new developments on any scale have come onto the market," says Schaefer.

An interesting situation is developing in Durban, where new developments are only starting to come onto the market, albeit not as many as Johannesburg or Cape Town. According to Schaefer, up until the last month or two, the letting market was very firm. However, the letting market slowed down considerably during July.

"We will have to wait and see if this is a result of new stock coming through, or due to the fact that July is traditionally a poor month."

Schaefer emphasizes that it is critical that landlords are aware of development trends so that they do not price themselves out of the market in times of high supply.


Last modified on Monday, 21 October 2013 20:43

Most Popular

Strong demand boosts Balwin as it claws back three months of no construction activity due to covid lockdowns

May 18, 2021
The Huntsman 2
JSE listed Balwin Properties, a developer that cares about environmentally responsible…

Construction kicks-off at the R500-million Boardwalk Mall

May 17, 2021
Architects presective of the exterior  of the Boardwalk Mall
Flanagan & Gerard Group and Emfuleni Resorts, a subsidiary of Sun International (JSE:…

Growthpoint leverages development prowess to re-imagine La Lucia Mall as a vibrant suburban mixed-use experience

May 17, 2021
Growthpoint Properties (JSE: GRT) is applying its development expertise to unlock…

Residential sectional title sales again on the rise

May 27, 2021
Over the past 15 years, the sectional title market in South Africa has become entrenched…

Successful degearing and continued dividend payments has allowed Investec Property Fund to continue rewarding shareholders

May 19, 2021
Andrew_Wooler_IPF (1)
Investec Property Fund, (“IPF”, or “the Fund”) today announced a resilient set of…

Please publish modules in offcanvas position.