The quiet "backwater" of Port Elizabeth is currently enjoying one of its most exciting periods of property market growth, says Gerhard Kotzé, CEO of the ERA South Africa property group.
"With an economy originally based on the motor industry, this Eastern Cape hub has benefited significantly from South Africa's export boom, tourism and industrial and infrastructure development, notably of the Coega Industrial Development Zone (IDZ), and developments are taking place on numerous fronts, both residential and commercial."
The highlights of these projects were the focus of a recent seminar in the city by the SA Institute of Valuers and the Summerstrand area in particular stood out, with numerous new developments including a nine-storey Radisson hotel costing an estimated R350m.
"There has been a direct spin-off on demand for residential property in the area from these and other commercial developments, with sectional title units featuring prominently. A single residential stand on the beachfront also achieved a price of R14m recently, amounting to R8433/sqm, reportedly a record for the city.
"Humewood, also part of the beachfront, has seen similar escalation with developers willing to pay R4,2m for an 892sqm site."
Niche areas that were traditionally regarded as downmarket have been spotted by investors. In Humerail for example, traditionally a railways and harbours residential area, prices of single dwellings have jumped from R250 000 to R1.5m in recent years. Humerail overlooks the harbour and a major driver for this area's recovery is the plan for a new waterfront complex - PE has lagged behind Cape Town and Durban in this respect.
In North End, also traditionally a commercial area, demand for property has grown as a direct result of the 2010 Soccer World Cup stadium which is being built at a cost of R1bn+. Also, the old showgrounds in the area are to be converted into an industrial node.
Other developments of note, says Kotzé, are the revamping of the CBD as part of an urban development initiative which, it is speculated, will generate demand for affordable housing in refurnished properties. "And Bluewater Bay, traditionally a residential suburb, is the scene of a new development at a cost of R1bn including a shopping centre, cultural village and hotel."
The Coega IDZ centered on the new Ngqura port is set to generate investment of some R24bn with spin-off demand for residential property in and around the immediate area as well as further afield, he notes.
"Meanwhile numerous other new developments are in the pipeline including a golf estate in Walmer and projects in Fairview and Greenbushes among others as well as prestige development of coastal sites bordering the Driftsands Reserve, site of the University of Port Elizabeth.
"And the benefits of all this activity are now spreading further afield to the likes of Uitenhage and even East London."