2010 boom for the East Coast?

High building costs, the development of East London's IDZ (Industrial Development Zone) and rising demand from an emerging middle class of civil servants are factors nudging East London house prices ever upwards.

But, says Colin Kemp, principal of Kemp Estates, while admitting that it might cost a little more to buy there initially, where the average price for house sales concluded is currently R722k, quality of life on the Sunshine Coast provides real value for money in the long run.

Mike Jarman, professional associated valuer, appraiser and realtor of Nationlink and East London Estates and Auctioneering agrees, as does Hanlie Bassingthwaighte, principal of the local branch of Pam Golding Properties. "Activity in East London is now matching the vibrancy seen in the Western and Southern Cape over the past few years. This area is the new 'hotspot' owing to its plentiful supply of beautiful coastal investments at prices well below those in Cape Town and Knysna. As there is a limit to the amount of coastal land available in South Africa, the East Coast will grow in value, thus assuring value for money for investors and home owners alike."

Most agents are reporting increased sales along with a critical shortage of stock in the lower and middle price brackets up to the R1,5m mark. Consensus is that Beacon Bay is the "in-place", along with Gonubie and the more central suburbs of Bonnie Doon, Nahoon, Stirling, Vincent and Selborne. Easy access to good schools, shopping centres, work places, highways and beaches make these areas particularly popular, says Bev Foord, partner in Lifestyle Properties. Adding Blue Bend, Nahoon Mouth and Bunkers Hill to the list of most sought-after suburbs, she notes that there is also great demand for properties with sea or river views.

According to Anne Chegwidden, broker and owner of Remax Sunshine coast, property development in and around East London is at a prime. She says there is a distinct coastal focus, although developments are to be found everywhere, especially in the form of clusters and townhouses where stands sell in the R450k to R800k price range. In addition to the current wave of new residential growth being experienced by the city, Bev Foord says commercial development is also at a premium with several new malls in the pipeline. She also notes that there is a steady uptake of premises in the IDZ, and that tenders for the upgrading of the East London Esplanade and adjacent beachfront areas have now closed.

There is, however, a downside to East London's development in the form of the town's inadequate infrastructure, which some describe as "archaic". According to agents and developers interviewed, this is affecting sewerage connections and electricity supply, which in turn is pushing up building prices and hampering progress. A further administrative problem is reportedly long delays in terms of the rezoning of land from agricultural use to residential or commercial.

Generally, though, local agents are upbeat about 2007, a year in which they expect initially slow growth that will lead to greater buoyancy from 2008 and finally another boom by 2010. Reports are that a correctly priced house averages 30 days to sell before it changes hands for about 5% less than the original asking price. Market activity has not decreased in the last 12 months and demand is particularly strong in the middle price range, they add. Most buyers are locals, many of whom are upwardly mobile, say the resident estate agents, adding however that there has been a recent swing to upcountry buyers seeking coastal properties for investment reasons. – Ingrid Smit

Readers' Comments
I grew up in East London but now live in Cape Town. I noticed during the recent festive season that the development there is truly amazing. What seems to have been kept a secret for years has now been let out of the bag. In my non-biased opinion I truly believe that Gonubie and the East Coast Area as far up as Cintsa bay has the most beautiful beaches. So beautiful in fact I have bought a second property down there for a return on investment. That area is going to explode so get in while you still can! - Vaughan – Missingustaxgonubie!

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