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Garden Route, Eastern Cape property boom sets strong foundation

The Garden Route and Eastern Cape region property market performed better than expected last year, says Tony Ketcher, regional manager for the Seeff property group’s operations across this region.


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“The latest Lightstone data for the Eastern Cape shows that the East London metro experienced a decline of just over 10% in overall transactions, but still generated just over R1.68 billion in value. Port Elizabeth, on the other hand, only experienced a marginal decline in overall transaction volumes, but achieved a higher overall value of more than R3.676bn.

“The bulk of transactions were properties priced below R1.5m. Both centres show a notable increase in younger buyers with the under 35-year age group representing about a third of all activity for the last year.”

Stefaan Verlinde, licensee for Seeff Oudtshoorn, says that sales have increased since 2015 and he expects a further rise this year. However, he says, this will depend on enough well-priced stock coming onto the market. Right now, most listings are overpriced and buyers are just not seeing value.

“Well-priced homes are still selling within a month, and there is also strong demand for agricultural property. An influx of people from other provinces is fuelling the demand across the board, from sales to rentals and there is now a shortage of rental properties. The R880 000 to R1.2m price range is the most popular and for rentals, the R4 500 to R6 000 a month range,” says Verlinde.

The coastal town of Jeffreys Bay is another area that reports a positive outlook. Gerrie Nieuwenhuis, Seeff’s licensee for the area says the agency experienced a hike in overall sales since 2015, but he has observed a slowdown towards the end of last year, especially for second holiday and retirement properties.

“The banks are very tight on lending for secondary homes and are again starting to demand higher deposits,” he says.

“On the whole, properties priced below R2m still attract attention, but above that, we expect only selective interest. The highest demand is in the R800 000 to R1.2m range for standard three-bedroom houses. It is also mostly older buyers who are buying here. Only 14% of the sales are to buyers in the under 35 age group. The rental market is also still busy with the biggest demand in the R4 500 to R7 000 a month range.”

The Garden Route is especially upbeat, says Ketcher. In most instances, overall activity was up last year and the area clocked up an average price growth of 5% to 7% on the whole, but with obvious exceptions in some centres.

“The area is now seen as a popular alternative to Cape Town, especially for those who want to escape the busy city life. Prices on the Garden Route are also well below what you would pay across Cape Town, up to half in some instances,” says Ketcher.

With an international airport, busy commercial hub of George and Mossel Bay and excellent schools, he says it makes sense for buyers moving here from other provinces, especially Gauteng and the northern regions.

The areas are seen as relatively safe and providing an excellent quality of life to raise children. There is less traffic and stress and the climate is more temperate. This is also a big draw-card for holiday makers and retirement buyers. The area is also very popular for its golf courses.

He says overall activity for George is up since 2015 and the market yielded about R1.5bn in total value. Neighbouring Mossel Bay was marginally down in sales volumes, but still yielded R1.22bn in property transactions for the last year. Almost 40% of activity is attributable to families, often moving here from other areas.

Plettenberg Bay meanwhile topped a record R1bn in total transactions last year according to Kevin Engelsman, Seeff’s licensee for the area. Here too, there has been an influx of people moving from up north to the coast with the R1.5m to R3m price bands being the busiest.

Engelsman expects 2017 to slow down, although he hopes the market will at least remain on par with last year.

“There has been a definite improvement in the demand for second and holiday homes as well as retirement properties, the additional flights to Johannesburg being a big boost. We are now experiencing a shortage of stock in the lower price bands,” he says.

Knysna too report a busy 2016 and an optimistic outlook for this year. Gail Giannone, managing director for Seeff, says that central Knysna and the waterfront areas such as Thesen Islands are especially in demand, fuelled by an influx from Gauteng and Cape Town.

There is a severe shortage of rental properties in the town and a single listing can easily attract 20 or more applicants, says Giannone. In general, the biggest demand is for properties priced below R2m and for rentals at around the R5 000 a month range.


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