NEWS

Economic Hard Times Hit Tenants Hard

More and more tenants are struggling to pay their rent.

24/10/2017 07:00 SAST | Updated 24/10/2017 07:00 SAST
FREDERIC J. BROWN via Getty Images

More and more people are not paying their rent, as the ailing economy hits the pockets of renters, The Times reported on Tuesday.

According to the latest Rental Monitor report from credit bureau TPN, late-payment rates are lower than in 2008 -- at the height of the financial crisis -- but are higher than in 2014.

The number of tenants who did not pay their rent reportedly increased from 10 percent in 2014 to 17 percent in the second quarter of this year. The number of tenants making partial payments or needing grace periods from their landlords decreased from 85.9 percent in 2014 to 82.8 percent in 2017.

Tenants with rent lower than R3,000 per month struggle to pay their rent the most, according to the report, with more than 50 percent not paying their rent on time.

FNB property strategist John Loos reportedly said: "Being the group that, on average, is less skilled than the higher income groups, we believe that it suffers worse in terms of job and income loss in weak economic times."

Tenants paying over R25,000 per month also pay late, and about 60 percent of these tenants pay their rent on time.

Economic indicators leave little hope for struggling South Africans. South Africa's economic growth was just 0.3 percent in 2016, and the International Monetary Fund recently cut its economic forecast for South Africa for 2017, according to Business Tech.

South Africa also dropped 14 places in the latest World Economic Forum Fund Global Competitiveness Index, IOL reported.

According to Fin24, Old Mutual expects the country's economic growth to be at just 0.8 percent by 2018.