The rental industry has faced many challenges over the past 18 months – not least the job losses and financial pressure making it harder for tenants to pay their rent in full. And while the industry has done very well to reverse much of the damage, more needs to be done.
Hard work, just rewards
Many tenants, landlords and rental agents have been forced to have uncomfortable conversations, renegotiate rental terms and ultimately work together to act in the best interests of everybody concerned. But thanks to the consistent efforts, collaboration and incredible empathy of rental professionals and their clients, tenant arrears are now back to the pre-pandemic normal after hitting record highs in 2020.
The latest edition of the PayProp Rental Index shows that in Q3 2021, just 19.1% of tenants were in arrears – even lower than the 19.4% seen in Q1 2020 before the first lockdown. The amount owed by tenants who are behind on rent has also fallen, from more than 100% of the average monthly rent at the height of lockdown in Q3 2020 to just 82.3% now.
But there’s more to be done
But while the storm may have subsided to an extent, South Africa’s property industry isn’t out of the doldrums yet. PayProp Rental Index data shows a stabilising national rental growth rate over the last three quarters, but at a very low year-on-year percentage due to ongoing affordability issues and an oversupply of housing for rent.
At the same time, inflation has been steadily climbing, increasingly outperforming rental growth and putting pressure on industry earnings.
Note that rising inflation is not always an indication of a recovering economy. While StatsSA has reported some economic growth of late, we have still not clawed back the losses suffered during the beginning of the pandemic. Prices in South Africa are being pushed higher by fast-rising input costs, such as electricity and fuel, rather than being pulled by higher demand, which would be indicative of healthy growth.
What lies ahead
Now that we have moved into the last two months of 2021, we all still have work ahead of us to reverse the impact of COVID-19. Now is not the time to languish in unfortunate circumstances but to make good, positive business decisions.
This is the time for estate agents to set themselves up for a match-winning performance. Time to remember and consolidate the lessons we’ve learnt during lockdown. Lessons like how much better off we are when we harness the power of digital technologies and automation to unlock massive efficiencies in our businesses and overcome disaster through distributed working.
Like Zoom or Slack, the right payment automation tools and partners will free up property professionals’ time, money and agencies for more – giving them more out of work, more out of business, and more out of life.
Agencies that grab these competitive advantages can thrive even in challenging market conditions. And it seems many are already realising this as we continue to welcome new rental businesses onto the PayProp platform – many of them in previously underserved areas.
Many other rental businesses are only looking to recover from the rental market’s recent slowdown – but by making the right choices, they can do much better. In the words of William Ernest Henley’s much-loved poem Invictus: “I am the master of my fate: I am the captain of my soul”.
Find out how PayProp’s powerful rental payment automation platform gives thousands of rental businesses a competitive edge on three different continents.