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Money is tight across the board, but if you’re savvy, you can negotiate a good rental deal, writes Angelique Ruzicka
The cost of living just keeps going up, and there’s no respite in sight, thanks to this week’s astronomical increase in the price of petrol. The knock-on effect of this will mean you’ll pay more for pretty much all your consumables and even some services. But the good news is that, if you’re leaving the nest and are keen to rent a property, market conditions are in your favour.
It’s not just certain cities or areas that are going through this cycle – where tenants and not landlords are dictating terms – price also comes into it.
Rozanne van der Lugt, rental manager and owner of Van der Merwe & Robertson Properties, says: “The South African rental market is in a cycle of slow growth, but, in the Western Cape in particular, there still seems to be a demand compared with everywhere else. As soon as properties go above R12 000 a month, there are fewer people interested. The ones below that tend to go more quickly.”
What are the reasons behind this slump in the market? According to property experts, the factors vary, but in this environment, the tenant is in a great position.
Properties flooding the market
Gail Cawood, letting manager of estate agency Knight Frank, says that, for the past few years, they have seen a huge increase in rental property in Cape Town.
“Landlords could literally name their price, but then we suddenly got scores of new developments flooding the market, so renters have competition and the only way to go is to drop the price.”
People are sharing
High rental and house prices have forced consumers to make other arrangements when it comes to accommodation. Young adults have foregone flying out of the nest and have instead chosen to stay with their parents for longer.
Many people are also sharing accommodation with friends and family and, as this can be quite a comfortable arrangement, they feel no urgency to move out. This means there are fewer people shopping around for accommodation, which again puts the power in the tenants’ hands.
The Airbnb phenomenon
When Airbnb entered the South African market, it suddenly allowed anyone to become a guesthouse/bed and breakfast owner.
“There has been a huge uptake with Airbnb. It’s flooded the market and, while some people might have full houses in summer, the rest of the time they are suffering, so they are coming back to the long-term market, which means more stock for us and not enough people to rent,” explains Cawood.
Experts are unwilling to say how long this rental market will last, but the abundance of choice is creating a stale, slow market where people are taking their time to make up their minds about where they want to live and are haggling to get a fairer deal.
However, you can only negotiate from a position of strength. If you have a poor payment and credit record, you will not be an ideal rental candidate. In these tough economic times, landlords will want to deal with tenants who can prove that they will pay their rent.
Tips for renters
Now that the market has turned, there are many tactics potential tenants can adopt to ensure they get a good price:
HAGGLE: If you see that a property has been on the market for a long time, you have the power to negotiate a good deal.
DEMONSTRATE YOUR WORTH: If you have a good history of repaying your landlords, stellar references, a stable job and a good credit score, you will be a sought-after tenant. Landlords like to know that their home is secure and that they will get paid.
State your price, highlight the fact that you are a good candidate and you’re bound to get the price you’re looking for.
BE FIRM ABOUT INCREASES IN YOUR RENT: If your rent is up for renewal, you shouldn’t just accept any increase that comes your way if your landlord allows you to stay on.
“Our advice to current landlords is to stay put with the tenants that you have,” says Van der Lugt.
Cawood says that if your landlord is not willing to listen to you and rental increases are high, take advantage of the current market and find somewhere cheaper to live.
