'Incredible' bargains in residential property obtainable at Jeffreys Bay and nearby villages

These days many of those who follow the ups and downs of residential property in the Eastern Cape do not remember that the small coastal holiday village of Jeffreys Bay, 80 km west of Port Elizabeth and famous for its ‘perfect wave’ (which has made it one of the top ten surfing venues in the world and created a whole culture of surfing visible throughout the town) had a property boom in the 2004 to 2009 era.

This golden era was brought to an end by the 2009-2011 recession, which, as elsewhere, saw second homes flooding onto the market and price drops of 30 to 50%.  Since then estate agents in the town have had very high stock levels (the Rawson Property Group has 200 homes on their list) and very low sales – and it has to be remembered that even today there are some 70 agents serving this 100 km stretch of coastline from Van Staden’s Bridge to Storms River eking out livings on low turnovers.  Last month only 25 transfers took place and a fairly high percentage of these were repossessed and/or inherited properties.

However, Billy van Loggerenberg, co-franchisee with Wikus van Rensburg for the Rawson Property Group in this area, reports that in the last few months, for the first time in a long while, he has seen December and January holidaymakers coming back with enquiries and new enquiries surfacing regularly – at the rate of five or six a week.  This, he says, is a big improvement.

One reason for this may be that it is now accepted that a new nuclear power station will be built 20 km west of Jeffreys Bay at Oyster Bay (currently 50 km by road via Humansdorp, but a new 20 km road will be constructed) and in five to ten years’ time a workforce of some 3,000 people including 800 engineers will, it is said, be employed on the site.

In today’s market, however, Jeffreys Bay properties can still be bought at very low prices.  Houses that sold previously at R5 million to R6 million are now selling at around R3 million and a luxury beachfront mansion with six or seven bedrooms priced at R11 million was not so long ago sold for R7 million.

Even so, says van Loggerenberg, many of today’s buyers are completely unrealistic in their expectations, hoping, for example, to pay R800,000 or less for a three bedroom home already reduced to R1 million from R1,3 million.  Homes of this kind, he says, probably represent the best buys in Jeffreys Bay today.

On the rental front, landlords in the absence of buyers can now charge R3,000 to R8,000 per month for a three bedroom home, the typical rental probably being around R4,000 per month.  This, says van Loggerenberg, is half what would be charged in Port Elizabeth today where there are very few middle class homes available for rent at below R6,000 per month and many charge R12,000 to R15,000 per month.

Looking ahead, van Loggerenberg says that those farsighted investors who aim to get into the property market when prices are low should now be having a good look at Jeffreys Bay.  The inevitable eventual upturn will probably become evident from mid-2015 onwards and this, he says, will result in slow but steady price increases.

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