East London residential prices stabilising

East London: Silvia Kessler of Continental Homes says that prices, which sky-rocketing during the area's mini boom, have now started to stabilise. The rental market has also slowed and buyers who purchased during the boom are not getting the returns they had hoped for.

Ongoing residential development in the Eastern Cape is attracting newcomers to the area but there could be a glut in this market owing to the high numbers of units coming onto the rental market next year. Demand remains strong for golf estate living and holiday homes, and overseas buyers are still making their presence felt.

Affordable stock is in short supply: rental stock under R8 000 a month is quickly snapped up, while there is nothing for sale under R500 000 and demand has moved to homes priced at under R700 000.

Durban North, KwaZulu-Natal: Irene Pullen of ProProp Durban North reports that prices have stabilised with sellers now more prone to heeding pricing advice from agents than they were a few months ago.

Most market activity is in the R1,1 million to R1,8 million price range with very little stock priced at under R1 million. Unit sale volumes are high as more people opt for the security and lock-up-and-go lifestyle offered by developments. Show house attendance is good although Pullen says there is no doubt that many prospective buyers are waiting to see how the economy performs in terms of the rising cost of living before putting pen to paper.

Benoni, Gauteng: July and August are traditionally quiet months in the local market, says Dixie Waring, with this year proving no different. While she believes the future could be bright for the industry as a whole, especially in light of the 2010 World Cup Soccer, the current lull is seeing properties, especially those over-priced, sitting on the market for two months or more. House price growth in her area has been acute and a three bedroom house in a reasonable area that would have cost around R450 000 late last year, would now sell for R600 000 and upwards.

The rental market is also quiet at the moment as a result of the relatively low interest rate, which has allowed tenants to buy their own homes.

Bellville, Western Cape: With many offers coming in at up to R100 000 less than asking price and sellers refusing to accept them, it's no wonder that the market is quiet, says Benita Basson of Acutts Bellville.

Stock is plentiful but over-pricing remains a problem and even though show house attendance is good, most visitors are not committing. Demand is focused in the R700 000 to R900 000 price range, although there's nothing under R800 000 on the market - and then it invariably requires costly upgrading or renovations of up to R150 000.
(All news from NRN Newsletter August edition)
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