The tax benefits of home ownership
Johette Smuts, Head of Data and Analytics at PayProp said: “We’ve analysed data from our earliest Indices in 2012 and it’s clear that the cycles last anything from 6 to 11 quarters. In Gauteng, the cycles have been 7 quarters and 6 quarters in duration, respectively, indicating that there might be some good news for Gauteng soon.”
In contrast, Smuts said the the Western Cape had not shown any clear peaks and troughs. She said the lowest points over the period (2012 – 2018) were the first and last quarters, therefore one could see the whole period as one cycle.
“The province has not shown any signs of a second cycle and rent levels continued to grow at around 10%, until the end of 2017. “If the other provincial cycles are anything to go by, the Western Cape is at the start of a declining cycle, and it’s likely that there will be at least two more declining quarters before we can expect an upturn,” she said.
Smuts advised property owners and property management companies not to stop mitigating risk in order to protect income levels. “We know that consumers are continuously under more pressure – living costs are on the rise and incomes aren’t increasing at the same rate. Some tenants can be worse off now than when you first placed them, so it makes sense to recheck tenants before you re-place or renew rental contracts,” she said.
