Families, young buyers drawn to PE value and lifestyle
A quality lifestyle combined with great property value has kept the Nelson Mandela Bay (Port Elizabeth) property market relatively upbeat despite the economic challenges, says Werner Boshoff, manager for Seeff Port Elizabeth.
The area boasts one of the best climates in the country, a laid-back coastal lifestyle, beautiful coastline with popular beaches and plenty of inland attractions including nature and game reserves. While you have all the facilities and amenities on hand, you get to live a quality life and it is a popular city for families and young people alike.
With our own popular university, the NMMU (Nelson Mandela Metropolitan University), it comes as no surprise that we have many devoted residents who stay on. Even those who eventually move away for work for example, regularly return for holidays, he says. It is of course a very popular family and even honeymoon destination and is increasingly popular for holiday homes.
Like most other areas, Port Elizabeth is also seeing a flood of property listings, many priced above the current market as sellers tend to compare their own properties with those currently on the market, rather than those that have actually sold recently. Property values have only increased by around 5.7% over the last year. The result is that offers are coming in at about 25% below the asking prices. Sellers therefore need to adjust to the market if they want to find the right buyer, he says.
For serious sellers, there is definitely still a market, he says. Apartment prices start at around R800,000 for a two-bed unit, townhouses at around R900,000 and three-bedroomed houses at about R1.1 million which clearly demonstrates the good value for buyers. As with most coastal areas, a home close to the sea or with a great sea view will cost about 10%-15% more.
There is something here to suit every buyer and budget, says Boshoff. Most areas still offer excellent value. The suburb of Lorraine is one that stand out as it offers a wide range of freehold and sectional title properties as well as some brand new developments, mostly in the R800,000-R1.3m price range.
Holiday buyers will enjoy some great properties on offer in the smaller seaside suburbs such as Kini Bay, Seaview and Beachview. These suburbs are situated in close proximity to the beach and offer great value for money with prices in the R1.4m-R3.5m range.
Peter van der Westhuizen, rental agent for Seeff says that there is a strong rental market with demand coming from a broad range of tenants, from young couples and families to older people scaling down and newcomers relocating from other provinces. We also have demand from students who study at various varsities and colleges in the metropole.
The highest rental demand is in the mid-range between R4,000-R8,000/month for family homes close to schools and townhouses with a garden and a garage in a secure complex, he says. Student apartments and accommodation is also in demand since the NMMU (Nelson Mandela Metropolitan University) only provides accommodation for about 10% of its students.
Given the high demand for rentals, stock is fairly limited which, he says, means that listings do not stay on the market for long. Buy-to-let is thus still a good opportunity for investors in the mid-range segment. Rates and utility charges are still reasonable although water restrictions with penalties for over usage are in place at the moment.
Van der Westhuizen says that where other cities such as Cape Town for example, are experiencing a decline in demand and the monthly rental rates, Port Elizabeth is still seeing healthy demand with rental escalations of 5%-6% for lease renewals and 6%-8% for new leases.
Contact Seeff Port Elizabeth on 041 581 0112 or visit www.seeff.com.