Evictions set to rise as tenants feel the pinch

We’re seeing an excess amount of vacant properties. Tenants have either: been evicted, had to move out due to affordability, or, in the case of Airbnbs, are vacant due to a lack of tourism. This is particularly evident in Cape Town, our major tourism hub.

While evictions have been an ethical and legal ‘grey area’ during lockdown, eviction lawyers are now preparing for an influx of cases. Orders for eviction can now be executed should the judge deem it just and equitable.

The topic of eviction remains ever contentious and is placing immense pressure on both landlords and tenants. However, landlords should not to get ‘desperate’ when looking to fill empty properties. Prior to lockdown, we saw supply outweighing demand and this trend continues. Affordability levels by tenants is more important than ever before and I would strongly appeal to landlords to do their due diligence before selecting a tenant for their property.

There is a sign of hope in these trying times: A prolonged buyers’ market has seen a spike in residential property sales since June. Another repo rate cut combined with this sudden spike in sales has some agents and prospective sellers rather excited. With this in mind, it is important to take a conservative, calculated and logical approach when purchasing or selling a property.

Affordability levels

Among many other sobering realisations, Covid-19 has highlighted the need to live within our means. Many South Africans live from dayto day with no savings or credit facilities in place. The pandemic has certainly taught us to prepare for situations out of our control.

So, how much of one’s salary should be allocated to rent or bond repayments each month?

The golden rule is that you should spend a maximum of 30% on housing each month. Why this amount? By limiting your expenditure to 30% of your nett salary, you are ensuring that you have enough budget to pay for other living expenses, including transport, food, education and other essentials, as well as potential savings or reserves for unforeseen circumstances that may arise.

Scaling back and finding alternate avenues

In terms of reducing spend on housing each month, try downscaling and making sure that you have flexible lease terms which work in your favour should you wish to do so.

Consider the current economic environment we find ourselves in and take a look at your immediate environment – perhaps you are paying for space or amenities (like those in an off-plan development) that you are not making use of but are paying a premium for.

Shop around in your area to compare prices. Other ideas might be to rent out unused space in your property, for example a garage to someone looking for additional storage space or even rent a bedroom out to someone that will then share your living space as well as the cost of utilities. If you are renting, be sure to get permission in writing from your landlord prior to subletting any portion of the property.