Recent data from the Department of Energy pointing to a petrol price hike of around 55 cents a litre, and diesel costs increasing by approximately 39 c/l has a definite influence on the economy. Despite the property market being seen as a long term investment and to a large extent resilient to short term economic fluctuations the rental market can often be susceptible to market instability and price hikes.
We've seen trends in the past where a continual rise in the petrol price undoubtedly influences the demand for rental homes closer to the CBDs, school districts and other popular amenities.
Often consumers can find themselves in a price pinch as the knock on effects of the petrol price increase influences food prices and other goods and services. This translates into the man on the street having to tighten his belt and reduce costs as expendable income is reduced. Because transport costs are linked to so many sectors fuel costs has an effect on a wide variety of consumer expenses.
Demand in the rental market is often a reflection of many different factors and not solely as a result of the economy. New estates, expansion and growth of a region, urbanisation and semigration are all factors that influence tenant requirements.
It is wise to do your research and consult a specialist rental agent that is able to offer sound insight into the market so that your decisions are guided by knowledge and expertise as opposed to an emotional knee-jerk response to a regular economic cycle.
Statement by
Richard Gray
Harcourts Africa Chief Executive Officer
