South Africa is experiencing growing demand for furnished properties, with top-end investors seeking to attract corporate tenants. In fact, in some areas demand for furnished apartments is higher than that for unfurnished living. This, say the experts, is putting pressure on rentals achieved on unfurnished flats as more short-term lets start entering the long-term rental market.
And, it is not only corporate tenants seeking an easy-style rental who want a fully furnished pad. Mobile living is seeing people less committed to setting up home, so expats, students and young business professionals are increasingly looking for furnished rental properties. But, what constitutes “furnished” depends on who is looking.
“For high-end or luxury rentals, crockery, cutlery, linen and all furnishings are a must,” says Lisa Hendricks, Atlantic seaboard rental specialist for Lew Geffen Sotheby’s International Realty.
“However, a standard furnished property should include bedroom furniture, soft furnishings such as rugs, cushions, curtains/blinds, couches and kitchen appliances including stove, fridge and washing machine.”
Generally, she says, foreign or corporate tenants who do not have the time or inclination to shop for furniture will opt for apartments that come with everything they need for a short or long tenancy.
“In the past few months, we’ve seen a slight increase in demand for fully furnished and equipped homes. Most of these tenants have come to us on corporate leases ranging from one to two years, students completing their final years of study, expats, and young business professionals looking for hassle-free renting close to the CBD.”
Residential properties within Amdec Group’s major high-end developments, such as the Yacht Club and Harbour Arch in Cape Town, are in “great demand” by local and international investors.
Some buyers prefer the buy-to-live option as they are typically scaling down from larger properties, or buying a second property for use on regular business trips, says Tersia Taljaard, sales consultant for the Amdec Group.
Over and above the investment, however, these buyers are also looking for a “hassle-free” experience post-sale. The group is seeing this demand for fully furnished flats to rent out nationally, particularly in their residential complex within Melrose Arch.
“Our investors certainly see better yields when renting an apartment furnished. For a small capital outlay at the outset, the returns are worth it.”
Demand for furnished apartments is currently higher than that for unfurnished living, says developments’ manager of Pam Golding Properties, Peet Strauss, who owns investment properties in Melrose Arch.
“Our furnished rental market is particularly great for overseas guests who arrive with a suitcase. They can move in and start working the next day,” he says.
Chris Weylandt, founder of Weylandts Spaces, says an increasing number of investors are requesting the brand to fully furnish their apartments.
This trend is also seen within the lower range of the market as the returns are better, says Jan-Otto van Eck, financial director of the Chas Everitt International offices in the City Bowl and Atlantic seaboard.
“This trend is now more measurable as many of these furnished apartments that were used for short-term accommodation have entered the long-term rental market. This has put downward pressure on unfurnished property prices as these are now competing against furnished properties in the R10 000 to R15 000 price range.”
Students are also demanding furnished properties, says Soretha Steenkamp, owner of the RealNet franchise in Stellenbosch.
“There is significant demand among senior students from out-of-town for furnished rental apartments and rooms.”
But the appeal of furnished flats is not seen everywhere.
In some parts of the southern suburbs, the trend does not exist, says Lorraine-Marie Dellbridge, rental specialists for Lew Geffen Sotheby’s International Realty in the area.
“In our experience, furnished properties are usually hard to let and it takes much longer to find tenants.”
This article was first published in Property360 on 22 August 2018.