Cash sales are coming to the fore in Port Elizabeth in evident reaction to stringent bank lending restrictions.
Dave Summerton, principal of leading city agency Homenet Summerton, says many buyers are going the cash route to capitalise on the next market turnaround and that up to 66% of purchases being made in some areas are now cash purchases.
Types of properties involved ranged across the spectrum. However properties in the R800 000 bracket are the most popular in the new market, and sellers have lowered their prices by as much as 20% in some instances, presenting ideal conditions for those with cash in hand to buy, he says.
Despite a decrease in overall activity in the local property sphere, correctly priced properties are still selling, says Summerton. Both sectional title and freehold properties in gated communities are particularly popular at present.
Further interest rate cuts, bargain house prices and lack of confidence in the stock market could lead to increased investor interest in property once more, says Summerton. "And property always represents a good investment albeit a long term one. Prices are somewhat static right now but the cycle of growth may be starting again and we expect conditions to improve in the latter part of 2009."
PE should experience a faster turnaround than some parts of the country thanks largely to macro-economic factors such as the massive Coega harbour, due to start operating later this year.
Meanwhile the PE rental market is faring fairly well. Rental rates have stabilised as landlords come to terms with the fact that tenants are also feeling the pinch, says Summerton. Rentals range from R6000pm up to around R12 000pm for upmarket executive homes in areas such as Walmer and Summerstand.
Interestingly, some sellers are opting to auction their homes as opposed to selling traditionally in a bid to achieve higher prices, but says Summerton, sellers need to be aware that their properties will still only achieve market value.
ISSUED BY HOMENET