East London and PE see sales uptick
am Golding Properties in the Eastern Cape hubs of Port Elizabeth and East London reports escalating residential property sales across all price ranges, since June this year.
Stands are also selling in both cities, suggesting a demand for new homes.
While the housing market here underperformed relative to the national market during much of the past decade, it has enjoyed stronger growth since late 2017, says Pam Golding Properties senior research analyst Sandra Gordon.
According to Pam Golding Properties area principal in East London Sean Coetzee, people are spending more time at home since the onset of the Covid-19 pandemic, which sees them selling or upscaling to larger properties or moving to more expensive areas closer to schools, beaches and other amenities.
He says investors are also buying property as they perceive a better return on their investment in this asset class. Top-end sales are seen in the Nahoon Mouth, Glen Gariff and Beacon Bay areas where a home recently sold for R6,35m.
Properties up to the R2m mark are also in high demand with popular areas such as Vincent and Beacon Bay fetching prices between R1,6m to R2,2m.
People buying in East London are mostly from the Eastern Cape areas such as King William’s Town and Mthatha, motivated by work transfers or seeking better schooling, says Coetzee.
“Many first-time buyers who were renting are now buying because the low interest rate makes it more affordable.”
Secure, lock-up-and-go properties remain in demand with sectional title sales increasing at prices ranging between R1,1m and R1,3m for a two-bedroom townhouse in a cluster development.
Justin Kreusch, an area principal for Pam Golding Properties in PE says family homes are in demand here with mostly locals either trading up or scaling down, and a small percentage of professionals relocating from other major centres.
“We’ve seen unprecedented activity in areas such as Richmond Hill, Walmer, Summerstrand, Lorraine, Glendinningvale and Mount Croix,” he says. “Sales at the top end of the market include a 520m2, four-bedroom home in Little Walmer Golf Estate for just under R7m.”
Port Elizabeth hasn’t experienced the expected countrywide buyers’ market post-Covid-19, instead, he says, well-priced properties aren’t staying on the market for more than a few weeks.
“A property we thought would fetch about R2,1m eight weeks ago, was priced at R2,4m and sold at full asking price, a month later,” he says.
Competing buyers push up asking prices
uyers competing for sought-after homes priced below R2,5m are in some instances pushing up asking prices, according to fixed-fee agency Eazi Real Estate.
“Not only are asking prices in this price band readily being achieved, they’re also sometimes exceeded, with these high-demand properties selling in one or two days,” says Eazi Real Estate’s CEO Richard Day. “This happens when buyers submit competitive offers, resulting in properties being sold for above the asking price.”
According to Day, Eazi has seen sales increase by 166%, 366% and 200% respectively for June, July and August this year. He says although they sell most homes in less than 30 days, some properties are now being snapped up in just a few days.
“Given our business model and technological capabilities, we were well-positioned and ready for lockdown. Our online systems were already in place, so we could adjust quickly and easily to the new regulations,” he says. “Our offer and administration processes have always been online, and going forward, more and more buyers and sellers are benefitting from this capability.”
With interest rates at record lows and no transfer duty payable on properties up to R1m, many of Eazi’s purchasers are first-time buyers and young couples or families, including those upsizing or downsizing.
This trend is underlined by mortgage originator ooba, whose first-time buyers comprised 53.4% of total mortgages in August.
Says Day, “The interest rate drop has had a marked impact on the number of buyers who have decided to buy rather than rent.
“In addition, we’ve concluded a few linked sales where owners are upscaling and therefore not only selling their property but also buying bigger properties. And in the sectional title market, we are defintely seeing an increased appetite for homes with gardens.”
Cape Town’s East City on the rise
ust nine months after launching to market, 63% of The Harri, a new 48-unit apartment block and mixed-use property development going up at 75 Harrington Street in Cape Town’s East City Precinct, has sold off plan. Only 16 of 42 studio apartments remain unsold, while just two of the six loft apartments are still on the market. Construction has already begun, with the completion date set for April next year.
The Harri’s units are priced between R1,3m and R2m for a studio apartment and R2,5m for a two-storey loft apartment.
The development, in the heart of Cape Town’s design district, offers a blend of apartment living with open-plan, tastefully furnished, co-living and co-working spaces, and includes fireplace lounges, a TV room with a large smart TV and access to Netflix, three dedicated Zoom (video chat) rooms, a rooftop terrace with a gas braai and mini-bar area, and hotel-grade amenities like Wi-Fi, a concierge, a housekeeping service, and 24-hour security.
“We sold right through lockdown,” says Jeff Kleu, co-developer with Steven Lampert, both of property-development company Sepia and Silk. “We sold to investors wanting to buy to rent, parents buying an apartment for their student kids or a holiday flat, and to locals as well as Zimbabwean, German and American nationals.”
Harrington Street has been at the heart of the recent revival of the East City, which was previously a gritty industrial-commercial area. Major developments here include the upgrading of the Cape Town City Hall at a cost of R27m, The Old Granary at R31m, the purchase of the Nicro head office on Harrington Street by a European company, Groupe SOS, for R30m, and the opening last year of a R75m five-star boutique hotel on Church Square.
Sandra Gordon, research economist for Cape Town’s Central City Improvement District, says, “Numerous applications submitted to the City suggest that a variety of new retail and food outlets are set to open their doors here, which will really cement the East City’s reputation as a trendy precinct that sees people flock to the area at the weekend.”
The Harri is close to the Gardens Shopping Centre, Virgin Active Wembley Square, and MyCiti bus stops. It’s also an easy drive to major beaches from the CBD.