Eastern Cape property market booms
Underpinned by increased investment in the region and improving investor confidence, the future is looking upbeat for the Eastern Cape’s housing market.
This is the outlook of national estate agency Pam Golding Properties.
Based on research, it maintains that the region’s coastline is capitalising on the fact that the coastal metro housing markets – defined as being within 500m of the coastline – are continuing to outperform noncoastal markets.
Senior company research analyst Sandra Gordon said Port Elizabeth and East London were attracting younger buyers, with most new homeowners aged between 36 and 49 or young adults under 35.
“The relative affordability of homes in these metros, combined with the coastal lifestyle offering, may well explain the appeal of these housing markets for young families and first-time buyers,” Gordon said.
“In 2017, while median prices for freehold properties in East London marginally exceeded prices in Port Elizabeth, activity in Port Elizabeth’s larger housing market has recovered more quickly in the wake of the 2008 recession.
“Port Elizabeth has also experienced a near-doubling in vacant plot sales during the past five years, suggesting continued growth in the housing market in the years ahead.
“Development around Coega remains a positive factor impacting on the demand for homes to buy and rent, while [China’s] Beijing Automotive Group Co recently made an R11bn investment in a vehicle manufacturing plant in Port Elizabeth, which is expected to become operational this year,” Gordon said.
She also expects the R10bn plant expansion announcement by Mercedes-Benz in East London to have a positive effect on the property market there.
“Notably, the exodus of residents leaving the Nelson Mandela Bay area for another region has reversed.
“Former Port Elizabeth residents are returning to stay.
“The major factors influencing this being lifestyle and schooling, with Grey old boys wanting their sons to study at their alma mater and daughters at Collegiate Girls’ High School.”
Pam Golding Properties’ area principal in Port Elizabeth, Ian Olivier, said the firm was experiencing ongoing demand for homes.
The popular areas were Walmer, Lorraine, Mill Park and Summerstrand, he said.
“Land is becoming scarcer but we are seeing developments being launched in areas such as in and around Baywest, Lorraine and Sherwood.
“Lorraine is always sought after for its value for money, as is Richmond Hill, which is upgrading and vibey as well as close to the central hub and transport routes,” Olivier said.
“Here you can acquire a nice home for under R1m, although for the first time we are seeing asking prices of up to R1.5m.”
He said there was a huge demand for student accommodation in Summerstrand as well as Central and Richmond Hill, with some investors buying up family homes to cater for this sector of the market.
Naomi Solomons, of Solomons Crafford Properties, said her company had enjoyed an exceptional month.
“Beachfront property sales have been absolutely wow.
“There has definitely been an upswing in the market and particularly in beachfront areas. The same has been experienced in East London.”
Solomons also referred to Richmond Hill as a hidden gem, saying properties in the area were sought after and were quick movers.
“Student accommodation is another area of exceptional growth,” she said.