The residential property market in the Eastern Cape has remained surprisingly resilient during the unprecedented times the economy currently faces.
Illustrating the increased demand for residential property, while the Eastern Cape housing market underperformed relative to the national market during much of the past decade, it has enjoyed stronger growth in prices since late 2017, says Sandra Gordon, Pam Golding Properties senior research analyst.
“Now, even as national house price inflation slows, growth in prices in the Eastern Cape continues to gather momentum,” says Gordon.
Port Elizabeth and East London remain popular
Since June this year, residential property sales have escalated in the Eastern Cape hubs of Port Elizabeth and East London specifically, says Gordon.
Further positive indicators are that investor buyers are making a comeback in East London, while in Port Elizabeth there is unprecedented buyer activity – with brisk activity across all price ranges, according to Pam Golding sales data.
“Buyers across the board include first-time buyers, those downsizing or upgrading, and holiday home buyers. In both cities, there’s also a steady flow of vacant plot sales, suggesting strong demand for new homes,” says Gordon.
Secluded suburb of Cove Rock
Clinton Krause, principal of Chas Everitt International in East London agrees saying, “The market in East London and surrounds is extremely busy overall”, off the back of the low interest rates and wanting a lifestyle change being the two main factors driving demand.
Krause says two coastal areas that are experiencing particularly high interest are the secluded suburb of Cove Rock and the seaside village of Winterstrand, to the south-west of East London.
“Cove Rock, which is just 10km from the airport, has always been popular with executives of the nearby Daimler-Chrysler plant, but now we are starting to see interest in the Cove Rock Country Estate, for example, from much further afield and even from Gauteng.”
“In the wake of the Covid-19 lockdown, many more people have realised that they can work or run their businesses from home most of the time and are actively seeking a more relaxed lifestyle in this type of development, away from the ‘crime and grime’, and traffic congestion of the big cities,” adds Krause.
The estate offers high security and excellent sports facilities, including a nine-hole golf course, as well as sea views, easy access to the beach, and a variety of superb homes at prices from around R1.2 million to around R3.7 million.
Small towns booming
While interest in secondary cities such as Port Elizabeth and East London have grown, demand in smaller towns along the Eastern Cape coast appear to be booming. Real Estate specialist have pinpointed marked interest in Jeffrey’s Bay, Kenton on Sea, Port Alfred and St Francis Bay.
There has definitely been an increase in real estate sales in small towns and settlements along the Eastern Cape coast since the movement restrictions imposed earlier this year were lifted, says Krause.
Brendon Lehana, principal of the local Chas Everitt International franchise shares how the traditionally sleepy holiday town of St Francis Bay is "booming".
‘40% of buyers wanting to relocate’
“We are extremely busy and have facilitated more than R100 million worth of sales in the past two months alone,” says Lehana.
“There has been a huge surge of interest since the lockdown movement restrictions were lifted and our sales enquiries are 75% up on our average for February/March, which is usually our busiest time of the year.
“What is more, at least 40% of the current buyers are looking to relocate permanently to St Francis rather than just to buy a holiday home,” says Lehana.
He says they are following a rising trend of relocation away from the big cities and metros to country and coastal towns that offer lower rates and taxes, less crime, no traffic and a much better quality of life, and this has definitely been amplified by the Covid-19 pandemic.
Busy December ahead
“Meanwhile, we are also seeing higher demand for commercial real estate to accommodate new businesses opening up in St Francis, and huge demand for both long and short-term rentals. At this stage most rental properties are being let within a couple of days of being listed at most, and our holiday accommodation is fully let already for the December season,” says Lehana.
Apartment prices in St Francis Bay start at around R850 000 for a one-bedroom unit, while prices for family homes range from around R1.3 million all the way up to about R19 million for the most sought-after properties on the canals.
Buyer will secure an entry-level property at R1.2 million in St Francis, while Jeffreys Bay can offer homes from R900 000. The greatest demand in St Francis Bay is in the R2 million to R4 million bracket and Jeffreys Bay homes are sought-after from R900 000 to R1.5 million, says Greta Daniel, national sales and operations manager for Pam Golding Franchise Services.
“Generally speaking, we’ve seen a marked uptick in sales in the past several months (June to September 2020).
Entry-level home price in Port Alfred is at R500 000, and a home in Kenton On Sea at R900 000, while in both of these sought-after coastal towns the greatest demand where stock is selling quickly is R800 000 to R2 million in Port Alfred and R1.5 million to R2.5million in Kenton.
While a quick drive inland to historic Grahamstown, and the entry-level is R850 000, and there is a shortage of stock up to R1.3 million because of high interest.
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