| There is no sharp upturn on the cards for the Eastern Cape residential property market, but continued steady growth is expected.
That's the word from Dave Summerton, Homenet regional director for the Eastern Cape and principal of Homenet Summerton, who says the market has slowed down in comparison to last year and that growth is now around 1% a month.
There are more properties for sale in most areas, show house attendances are on the decline and there are fewer enquiries coming in.
However, while prices have become much more negotiable at the top end of the market, there is still "reasonable" demand at the lower end and flats and townhouses within the more affordable price bands are selling well.
"One factor that is affecting the market badly, especially among younger buyers, is fuel prices. Another factor having an impact is the new National Credit Act which has seen banks start to apply stricter lending criteria."
Looking at the region in more detail, Summerton says the East London and Port Alfred areas are experiencing similar conditions to Port Elizabeth, with lower sales volumes, but that there has been steady growth in Jeffrey's Bay and that there is now a lot of development taking place in and around the town.
Turning to the rental market, he says demand is good - especially for homes that let for R2500 to R4000 a month - and that rentals are rising by around 5% a year, with flats in the centre of Port Elizabeth doing even better.
Looking ahead, Summerton says further steady growth is to be expected. "With more jobs being created ahead of the 2010 Soccer World Cup, and for the local population in general, more potential buyers will have greater spending power. In addition the Eastern Cape is expected to reap tourism benefits from the World Cup due to its malaria-free status and ample selection of game parks." |