South Africans are choosing to rent property rather than purchasing due to financial constraints, according to a survey. Picture: Freepik
The majority of people renting residential property are doing so due to financial reasons, with almost half of them admitting they cannot afford to buy property,
This is according to credit bureau TPN’s latest Tenant Survey, which gives the property sector insights into tenants' needs, wants, aspirations, and challenges. The survey canvassed opinions from over 170,000 tenants, and 19,000 completed responses were received.
High interest rates, inflation and restricted employment opportunities have significant impact on the ability of many people to own their homes while less than 10% of respondents said a poor credit record stopped them from becoming a homeowner.
Other reasons that people want to rent include:
– 17% of respondents rent because they want to have the flexibility to move
– 11.4% believe that it is cheaper to rent than to own a property
– 2.2% don’t want to incur debt;
– 1.8% are motivated by political uncertainty and would, therefore, rather rent than purchase a home, and
– 0.8% are either in the process of or planning to emigrate.
More women were renting when compared to men because they could not afford home ownership with women tending to rent in lower rental value bands compared to men.
The survey said 10.4% of female tenants are paying R3,000 or less per month for rent and only 0.4% of women are paying R25,000 or more per month for their rental accommodation. The majority of women pay between R4,500 and R7,000 per month.
According to the survey, men tend to rent in the higher rental value bands with 7.2% paying R3,000 or less a month.
Most men rent in the value band between R4,500 and R7,000, a third of them rent in the R7,000 to R12,000 rental value bands while 0.8% of men pay R25,000 or more a month.
More than half of female respondents said they are renting as they can’t afford to purchase a property. This is 10.2% more than men who are struggling with different issues.
Waldo Marcus, Industry Principal at TPN Credit Bureau said that that men are more preoccupied with South Africa’s political uncertainty and are considering or are in the process of emigrating.
Men are also struggling more with bad credit records - particularly those aged between 40 and 49 - than their female counterparts. They are also more inclined to believe renting is cheaper than buying property.
Marcus said: “Older respondents are more focused on avoiding debt and being concerned about political stability. Younger respondents, on the other hand, are less concerned about political and financial risk”.
Women tend to go for sectional-titled flats, townhouses, and clusters in a complex to a free-standing house while men prefer free-standing houses, followed by a cluster in a complex, and have the least preference for a sectional title flat or townhouse.
IOL Property
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