Increased demand from eco-tourists and first-time buyers is elevating the Eastern Cape as a key area in the property market recovery, with Port Elizabeth in the throes of a buyers' market, according to Willie van Niekerk, Jawitz Properties' franchise principal for Port Elizabeth, Uitenhage and Jefferies Bay.
The length of time the average house remains on the market has improved. Today sellers are waiting between three to six months before transactions take place.
Game lodges report that gaming viewing and hunting are popular pastimes. Demand for accommodation at these facilities has increased significantly over the years and these wildlife enthusiasts are now buying holiday homes near the resorts.
In addition, global and local contract personnel, working on projects such as the multibillion-rand Coega deepwater port of Ngqhurha and the Nelson Mandela Bay Logistics Park, will also play a role in increasing demand for accommodation, as will other infrastructure initiatives such as the construction of wind farms and power plants.
"This bodes well for the property market, long term," says Van Niekerk. "Historically, Port Elizabeth lags behind the rest of the county in market recovery, but there are a number of growth pockets."
Further inland, there's a seller's market in places such as Uitenhage, due to high demand and a shortage of stock.
Demand in the one to three million rand price bracket has increased. But in most cases this has been hampered by limited access to funds from the banks. Rentals in the entry to middle-price categories have grown substantially, due mainly to would-be first-time buyers and others not being able to get bonds.
Interest in the middle to upper end of the market is high and rentals are increasing, but are not yet at levels where they cover bond costs. This puts pressure on the buy-to-let market.
Cash buyers are selective and hunt for bargains. Some distressed sales are leading to good value, but, to a large extent, outstanding bonds on distressed properties are hindering the process.
"Interest among the emerging black middle class is growing and there is activity in the former townships. Once credit issues have been sorted out, these do result in sales. There hasn't been much demand from up-country buyers except for those wanting holiday homes near game farms," he says.
The length of time the average house remains on the market has improved. This time last year, properties would only change hands after 12 months of being on the market. Today sellers are waiting between three to six months before transactions take place. Show house attendances have gone up but, of course, not all of these translate into sales.
"A number of developments are to come on-stream shortly to cater for the entry level market - one that has been somewhat overlooked in the past. High demand for this type of accommodation will surely translate into bond approvals. The second hand market is seeing improved activity and, when in line with market-related prices, properties are selling," he says. - I-NetBridge
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