Q3 tenant payments best since 2008: TPN
Payment record of tenants improves to 83% in the third quarter from 81% in the second quarter and is the best since the second quarter 2008‚ says the Tenant Profile Network.
By Helmo Preuss
The payment record of tenants improved to 83% in the third quarter from 81% in the second quarter and was the best since the second quarter 2008‚ when it was 85%‚ the Tenant Profile Network (TPN) said on Thursday.
The “tenants in good standing” was based on tenants who paid on time category (71%) and the paid late in full (12%) category.
TPN noted that rental payment behaviour by value and province showed improvement across all sub-categories‚ as well as confirming the rating order has remained intact. Tenants at the lower end of the market (rent below R3‚000 per month) remained the most unreliable‚ followed by the top end (rent above R12‚000 per month) with the middle categories (R3‚000 – R7‚000 and R7‚000 – R12‚000) faring best.
The Eastern Cape (89%) and Western Cape (87%) continued to record above average collections; Mpumalanga (89%) and Limpopo (85%) similarly reflected quality tenants. However‚ Gauteng (80%) and KwaZulu-Natal (81%) continued to perform below average.
TPN said the national average rental price growth was once again achieving double digit escalations at 10.36% year on year. Nationally the average rental was R5‚102‚ while Mpumalanga had the highest average rentals at R5‚590‚ Western Cape R5‚343‚ Gauteng R5‚226‚ Limpopo R5‚003‚ KwaZulu-Natal R4‚829 and Eastern Cape R4‚328.
The improvement in rental payment performance in the third quarter may have been caused by the 50 basis point drop in the prime interest rate in July‚ which may have offered a small amount of debt service relief.
TPN were however concerned that the increase in unsecured lending could mean that tenants are using credit to pay for monthly living expenses‚ which was unsustainable.