Residential Rental Monitor
TPN - South Africa
Rental good standing continues to perform well when observed in isolation. One might also argue that as landlords have become more fastidious in tenant selection, there is a related increase in placement of better quality tenants who ultimately pay well.
This is substantiated by the fact that tenants in good standing for the third quarter of 2016 remain favorably positioned at 84.01%, made up of 66.57% who paid on time, 6.24% paid during the grace period and 11.20% paid late.
But beneath the surface, the overall credit profiles of many tenants are deteriorating. Unless this trend stabilises, it is simply a matter of time before rental payments will be negatively affected. Importantly, TPN notes that active tenants have shifted 4.2% from an excellent / good overall credit profile into an average credit profile. Nonetheless, one positive observation is that there has been no substantial increase in the size of the group of tenants with below average / poor credit profiles.
Residential Rental Monitor 2016 Q3
What are my rights when a tenanted property is sold?
Rawson - South Africa
Under South African law, a landlord is entitled to put their property up for sale at any time, but that doesn't mean that tenant rights and obligations are automatically forfeited.
Selling a rental with a tenant in residence isn't always an ideal situation, but the laws and processes in place are designed to treat all parties as fairly as possible.
"A lot of tenants rely on the South African legal principle of 'huur gaat voort koop' to protect their interests," says Jacqui Savage, National Rentals Business Development Manager for the Rawson Property Group. "Under this principle, a lease agreement is given precedence over an agreement of sale, which effectively entitles tenants to retain occupation until such time as their lease agreement expires."
While this is the default principle, Savage warns that there are circumstances in which it does not apply.
What are my rights?
Credit and mortgage advances
Absa - South Africa
Low growth in household credit and mortgage balances in 2016
The value of outstanding credit balances in the South African household sector increased by a negligible 0,7% to R1 485,7 billion in 2016, down from growth of 4,5% in 2015. This was the result of growth in secured credit balances slowing down, whereas unsecured credit balances contracted compared with 2015.
Growth in the value of household secured credit balances (R1 139,6 billion and 76,7% of total household credit balances) dropped to 2,3% year-on-year (y/y) at the end of December last year compared with growth of 3,8% y/y at end-December 2015. The slowdown in growth in secured balances in 2016 came on the back of lower growth in household mortgage balances (see below), whereas instalment sales balances (21,5% of household secured balances), largely related to vehicle finance, contracted by 0,8% last year from 2015. The contraction in instalment sales balances commenced around mid-2016 and is in line with a downward trend in new vehicle sales volumes, which dropped by 11,4% in 2016.
Household unsecured credit balances (R346,1 billion and 23,3% of total household credit balances) contracted by 4,2% y/y at end-December 2016 compared with growth of 6,7% y/y at end-2015. The contraction in general loans and advances balances is mainly the result of data distortions during last year (see the explanatory note in this regard), with the component of general loans and advances (largely personal loans and micro finance) the main factor behind this contraction. However, outstanding credit card balances also contracted in 2016, by 1,2 %, which contributed to the contraction in overall household unsecured credit balances last year.
Credit and mortgage advances (Dec 2016)