The Eastern Cape residential property market is tipped for renewed growth in the coming months, with the Bay metro in particular showing a very healthy recovery.
Despite a lacklustre national economy, the city registered average house price inflation of 5.4% during the first half of the year, making it the third-best-performing metro area in South Africa after Cape Town, at 11.9%, and Durban, at 7.5%.
“During the past five years freehold properties have risen in price by an average of 22.1% in Port Elizabeth and 29.2% in East London,” Pam Golding Property Group chief executive Dr Andrew Golding said this week.
Golding was speaking in Cape Town at the group’s annual media presentation on key trends in the national housing market over the past year.
While the Eastern Cape had lagged behind the other major regional markets in recent years, Golding said, house price inflation in the province was now finally gaining momentum thanks to significant infrastructure and property investments, which in turn stimulated activity in the local housing market.
In contrast, house price inflation in both the Western Cape and Gauteng was starting to cool.
“A variety of major infrastructure and property developments are currently under way in the Eastern Cape,” Golding said.
“These include the recent announcement by the Department of Energy that the Coega Industrial Development Zone would be one of the locations for a R25-billion gas-to-power programme, along with the record-breaking R11-billion investment by the Beijing Automobile International Corporation in a vehicle manufacturing plant, and ongoing development in the Bay West area.
“The massive new wave of economic investment, coupled with a new local government, suggests the Eastern Cape housing market will experience a renewed bout of growth in the months ahead.”
Golding said Port Elizabeth, as one of the least congested cities in South Africa and offering a high-quality lifestyle, was increasingly well positioned to attract wealthy buyers from across the country.
“Potential buyers are likely to be attracted by the opportunity to participate in the region’s economic revival and to take advantage of its relatively affordable real estate, international airport and coastal lifestyle.”
Golding said real estate agents in the city were already reporting increased interest in prime properties – valued above R3-million – as professionals relocated from other provinces.
Port Elizabeth franchise owner Ian Olivier said he had seen the so-called “semigration” trend firsthand this past year.
“I expect we’ll be seeing a lot more of it in future,” Olivier said.
“Nowadays, with all the technological advances, you can actually live and work anywhere.
“In Port Elizabeth, you get a seaside lifestyle with big-city facilities and great government schools, some of which are unparalleled nationally. And it’s value for money.”
Things are also looking up for the Garden Route, an area badly hit by the housing market crash of 2007.
The steady demand for Garden Route properties this past year should continue into 2017, Golding said.
“Knysna and Plettenberg Bay and the areas through to Mossel Bay are benefiting from the push down to the coast and a sense of movement to secure locations which offer an attractive lifestyle and sense of community as well as still being reasonably priced.”
Golding cited a recent New World Wealth report identifying the Garden Route as an area increasingly attractive to dollar millionaires.
Pam Golding Franchise Services national sales and operations manager Greta Daniel said: “We’ve seen a fundamental change in the Garden Route market over the last 18 months.
“It struggled after the crash but has come back into its own with lots of demand, similar to what it was before.”
In most of the Eastern Cape country towns, however, the market remained fairly static, she said.