Durban (October 16) - Demand is high for student accommodation in Grahamstown in the Eastern Cape and investors are snapping up suitable properties.
“The area is home to approximately 125 000 people with more than 6000 of them being university students”, says Jonathan Pepler, principal of the newly opened Homenet Grahamstown office.
“This is due, of course, to the location of leading tertiary educational institutions such as Rhodes University and Eastcape Midlands College in the town – and it has created great opportunities for buy-to-let investors.”
However, Pepler says, rental properties in Grahamstown are currently scarce and relatively expensive. “There are not a lot of flats to be had and townhouses range in price from around R700 000 to R1,5m.
“Meanwhile three-bedroom houses which might previously have been let out for around R5000/month are now fetching around R10 000/month, due to the number of students that can be accommodated and the shared rental opportunity.”
Not surprisingly, Pepler says, the greatest demand for property in Grahamstown at the moment is for homes priced between R500 000 and R800 000. However he adds that there are also properties on the market priced at between R3m and R6m, “so the market is diverse and can cater for a wide range of buyer profiles”.
As is the case in many property markets across SA, Grahamstown has in the past year suffered from overpricing and homes sticking in the market for long periods. “However, the market is starting to correct itself as sellers realise the advantages of pricing correctly and achieving faster sales,” Pepler says.