Gqeberha sees big increase in new homeowners

Gqeberha remains a location of choice for new and aspiring homeowners, with an influx of new housing developments affording first-time buyers a foothold on the property ladder.

Recently published data by the Just Property Group and BetterBond indicates that more first-time buyers are applying for more money, as compared to the first half of last year.

Carl Coetzee, CEO of BetterBond, said a year of record-low interest rates had made it even easier for new buyers to invest in property.

“First home buyers are now able to afford more than they did early in 2020, when the prime lending rate was at 10%.

“This increased demand has seen the average purchase price of homes for our first-time buyers in the Eastern Cape increase by 9% for July, year-onyear.”

Coetzee said the interest rate was at its lowest in more than 50 years with the prime lending rate of 7% meaning buyers could afford up to 30% more than they could 18 months ago.

“Close to 40% of bonds approved for clients from Gqeberha for the 12 months ending in July were between R500,000 and R1m, with R1m being the threshold for the payment of property transfer duty.”

CEO of Just Property, Paul Stevens, said the Eastern Cape market was fuelled by previous tenants who could now buy for much the same monthly cost as they could rent.

“Historically low interest rates means that many tenants are opting to buy property instead of paying off their landlord’s bond by paying monthly rental,” he said.

Properties of R500,000 to R750,000 account for the lion’s share of properties sold by Just Property between January and July this year, with developments in Fairview, Walmer and Overbaakens being priced ideally within the bracket, Stevens said.

Similarly, 42% of properties sold in Qonce (formerly King William’s Town) and 35% of those sold in Buffalo City fell within this price band.

According to Just Property’s research, the average price of homes sold over the first six months in Gqeberha was R1.186,272, while in Jeffreys Bay the average was R1.101,538 and R1.220,714 in East London, with Makhanda averaging R1.446,667.

In neighbouring Kariega the average price of the house sales was R709,526 and Port Alfred was at a much higher average of R2.672,500.

Gqeberha’s sectional title market is doing particularly well, says Erica Venter, Eastern Cape sales manager for BetterBond, with Lightstone reporting average prices in 2021 of R789,000.

“This is in line with our data which show that 74% of BetterBond’s applicants in Gqeberha are first-home buyers, and the average age is 36.

“Also, 62% of our applicants are women buyers.”

The demand for modern, two-bedroom units close to schools and major transport routes seemed to be insatiable, she said.

“For every successful bond application, there are on average five other preapproved buyers in line for the same property. One gets the sense that buyers are purchasing properties almost as quickly as developers can build.”

Coetzee said with more people working remotely, buyers were able to consider towns and areas outside the main urban hubs where property might be more affordable.

“The North West, Eastern Cape, Free State and Mpumalanga offer plenty of opportunities for aspirant buyers,” Coetzee said.