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South African residential tenants’ payment behavior improves over third quarter

Despite declining consumer credit and slower than expected GDP growth, South African residential tenants’ payment behavior improved two percent during the third quarter of this year.

Data from the Tenant Home Network Rental Monitor revealed that the percentage of tenants in good standing increased to 83 percent from the second quarter, during which numbers remained flat as in the previous three consecutive quarters, SA Commercial Prop News reports.

The percentage of tenants in “good standing” is based on the 71 percent of tenants who paid on time and the 12 percent of tenants who paid late. Rental payment performance has not shown such positive results since late 2007 and early 2008.

Additionally, the data revealed that nine percent of residential tenants paid partially while eight percent of tenants did not pay at all.

The analysis also showed improvement across all sub-categories. Tenants at the lower end of the rent market are the most unreliable, followed by tenants at the top end, with the middle rent categories showing the most improvement, according to SA Commercial Prop News.

Collections in the Eastern Cape and Western Cape came in at 89 percent and 87 percent, respectively, and continue to post above-average numbers. The areas of Gauteng and Kwazulu Natal continued to perform below average at 80 percent and 81 percent, respectively.

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