The ‘Sunshine Coast’, as the Eastern Cape is affectionately known, has been plagued by persistent difficulties with service delivery and serious water shortages. However, over the past few years the province has seen an increase in both sales and purchase prices. Rhys Dyer, CEO of ooba Home Loans states that the Eastern Cape now prevails as the top contender, in terms of property price growth, among the major regions in South Africa’s residential property market. The region continues to show robust annual growth in housing prices – peaking at +7.01% in 2022 (January to October) – up from +6.35% in 2020 and +6.76% in 2021.
Dyer attributes this growth in part to the agriculture, renewable energy and automotive sectors which are big drivers of the Eastern Cape economy, stating that “the region recorded an employment increase of 20 000 jobs over Q4 ’22 as per the Quarterly Labour Force Survey. In Gqeberha, the average household income ranges between R44 000 – R57 500.”
Justin Kreusch, Pam Golding Properties area principal based in Gqeberha agrees, saying that about thirty minutes away in Kariega (previously known as Uitenhage), is the Volkswagen factory the largest vehicle manufacturing plant in Africa, which recently invested R235 million in a new wax flooding facility. The town is also well supported by a range of other industrial operations and businesses.
Kreusch shares that, “During 2022, almost a third (26%) of the town’s home buyers were young adults up to 35 years of age, many of whom were first-time buyers below 30 years of age. Most seek starter homes, including some sectional title apartments, comprising three bedrooms, one bathroom, lounge and kitchen.”
It would seem that it’s not only job opportunities attracting buyers, but also the affordability of properties. Warwick Heny, Broker/Owner of RE/MAX Kowie specialises in the coastal area of Port Alfred and surrounds and explains that “Our market is steadily active, with buyers coming from all over South Africa, including a good, few foreigners investing in property here. The reason must be since buyers are now actively seeking out more affordable destinations, with higher chances of growth, in quieter, smaller towns, which afford residents a better lifestyle than the now busy and rather pricey Western Cape for example”.
What are properties selling for?
Dyer explains that the average purchase price for homes in the Eastern Cape has increased gradually over the past decade. “According to ooba Home Loans’ data, the average purchase price in the Eastern Cape rose to R1.73 million in December 2022 – just R78 725 below the average price in the Western Cape. First-time buyers in the province paid an average purchase price of R1.14 million in February – matching the national average price paid by first-time buyers.”
Zeroing in on Kariega, Pam Golding Properties local agent in Kariega, Antoinette Naude explains that “Buyers can secure a basic beginner’s property with three or four bedrooms, one or two bathrooms and living area, in lower priced areas such as Scheepers Hoogte, Fairbridge Heights and Van Riebeeck Hoogte, or a fixer-upper property in higher priced areas such as Vanes, Winterhoek Park and Strelitzia Park for approximately R850 000.
Sectional title properties can be acquired between R400 000 and R680 000, depending on the condition and location, with freehold homes selling between R650 000 and R1.5 million in lower priced areas and between R850 000 and R2.5 million in higher priced neighbourhoods.”
Alan Phillips, regional manager for Seeff Eastern Cape and Garden Route, shares that great areas for buyers in Gqeberha include Walmer with an average house price of R2.7 million, Summerstrand with an average price of R2.55 million and Lorraine with an average transaction price of around R1.4 million.
Dyers sums it up, “The homebuying frenzy can be largely attributed to three key factors: 1) homebuyers enjoying ‘more bang for their buck’, 2) further demand for holiday homes in the region and 3) a wave of young adults, most of which are first-time homebuyers, early career professionals and young families, coming into the region. Not forgetting the recent increase in demand for homes from retirees (65-plus), mature (50 – 64) and middle-aged (ages 36 – 49) homebuyers”.
