Hundreds of newly-built double-storey apartments have been released in Soweto to rent for R3,200 a month including parking.

“Overall, the demand for housing in the affordable property sector is huge. But, access to finance and associated costs are driving consumers to rent rather than buy,” says Soula Proxenos, managing partner of International Housing Solutions (IHS) which is funding the Soweto development called Protea Glen.

In Soweto, 100 of the 176 units have been built and are already 100% occupied.

The Protea Glen project is one of a number of similar development projects in Gauteng as well as in Durban and Cape Town in which IHS is involved and which are expected to become available to tenants in the next few months.

Yankho Chitsime of IHS’ development team says the development is aimed at providing affordable rental opportunities to individuals earning less than R15k a month.

“There is huge demand for rental accommodation for this segment of the market. The response has been phenomenal with all the available rental units snapped up as they come onto the market.”

“Research shows that despite the high demand, there is very little stock at present. And because of the high cost of housing finance and general high debt levels of many SA households at present, providing homes for sale is not necessarily the best option. Our rental model is particularly fitting for these home seekers.”

The development team has partnered with Trafalgar Property Managers, which manages close to 50,000 units on behalf of owners nationally, to handle all the letting.

The Soweto project is being co-funded by the National Housing Finance Corporation (NHFC) which has invested R29,4m.

Raal Nordin, CEO of rental agency Only Rentals, says there is a great shortage of well-priced affordable stock. “We think landlords are holding on to any property stock for 2010. Rental properties of around R4,200 to R5,500 is in huge demand, and we are turning about 29 tenants a day (from 1 franchise) away due to a lack of stock.” – Eugene Brink