Are you seeing an uptick in home vacancies?
TPN’s Residential Vacancy Report shows that vacancies rose by about half from Q1 to Q2 2024, going from 4.42% to 6.72% – but not all locations and types of property have been affected equally.
Of the four provinces TPN reports on, KwaZulu-Natal and the Eastern Cape had the biggest increases – well as the most vacancies, reaching 17.61% and 12.94% respectively – while Gauteng and the Western Cape experienced smaller rises. In addition to their monthly increases, KZN and the Eastern Cape have also seen vacancy rates rise year on year, while Gauteng and the Western Cape have experienced drops compared to 2023.
The biggest rise in vacancies has been among the least expensive properties, reports TPN – although they have increased in all price brackets. Around 11% of properties renting for less than R3 000 per month were vacant in Q2, compared to less than 5% of properties priced at R12 000 or over – potentially due to unemployment and migration of lower-paid workers.
What will rising vacancies do to the rental market?
Rising vacancies could put downward pressure on average rents if landlords and agents cut asking prices to fill properties. So far, that hasn’t happened – or not enough to counteract rent rises.
According to the PayProp Rental Index, year-on-year rental growth in KZN rose from -0.4% in Q1 to +1.5% in Q2 despite rising vacancies, and the same happened in the Western Cape and Gauteng. By contrast, growth dipped in keeping with rising vacancies in the Eastern Cape, from 5.6% in Q1 to 5.0% in Q2.
Unless vacancies rise further, there is unlikely to be much of an impact on national rental growth. The national vacancy rate of 6.72% is in line with 2016 onwards (as far back as TPN’s report shows), and well below the 13% recorded during the COVID-19 pandemic.
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