The Eastern Cape is fast becoming the place to buy a home as it not only boasts some of the most popular coastal towns for semigrants, but properties here are seeing superior house price growth.
The Western Cape may still be the top pick for property buyers and South Africans looking to relocate, but its neighbour is giving it a run for its money in many aspects.
Out of the country’s major regions, ooba Home Loans states that the Eastern Cape is the top-performing area for property price growth, peaking at 7.01% during the first 10 months of 2022.
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This is an increase from 6.35% in 2020 and 6.76% in 2021.
“While the Western Cape has proved to be a popular choice for both semigrants and international investors alike, the Eastern Cape continues to outperform all other major regions in terms of property price growth,” says ooba chief executive Rhys Dyer.
Looking to the key metros, Lightstone data from January to October 2022 “depicts a healthy” 7.8% house price inflation in Gqerberha, in comparison to Johannesburg and Cape Town at at 1.8% and 4.0% respectively.
Dyer also explains that the average purchase price for homes in the Eastern Cape has increased gradually over the past decade, with the average purchase price in the Eastern Cape rising 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 R1.14m in February, matching the national average price paid by first-time buyers.”
Furthermore, Lightstone statistics show that the price of vacant plots more than doubled between 2013 and 2022.
The reason for this growth in popularity, and property prices is because the province is home to popular areas such as Gqerberha, East London, Stormsriver, King Williams Town, Cintsa, St Francis Bay, and Hogsback.
“The agriculture, renewable energy, and automotive sectors are big drivers of the Eastern Cape economy, and the region recorded an employment increase of 20 000 jobs over Q4 ’22 as per the Quarterly Labour Force Survey,” Dyer says, adding that, despite persistent difficulties with water shortages and general service delivery, home buyers are enticed by the idea of affordable, coastal living.
He says the “home buying frenzy” can be largely attributed to three key factors:
- Buyers enjoying ‘more bang for their buck’
- Further demand for holiday homes in the region
- A wave of young adults, most of which are first-time homebuyers, early career professionals and young families, coming into the region.
There has also been a recent increase in demand for homes from retirees (65-plus), mature (50 – 64) and middle-aged (ages 36 – 49) home buyers.
“We expect the region to remain buoyant over the next few years as semigration continues. We also anticipate more development, commercial activities, and government support in the Eastern Cape,” Dyer says.
Alan Phillips, regional manager for Seeff Eastern Cape and Garden Route, says Gqerberha is a “fabulous alternative” for coastal property buyers and still offers lower price points.
“Residents also have access to a great lifestyle and city amenities including good schools, tertiary education including the NMB University, great shopping centres and plenty of leisure facilities.”
Harcourts South Africa reports that many of its offices in the country’s coastal towns, including those in the Eastern Cape, saw an increase in demand for both sales and rentals during the summer season, compared to the same period last year. This, says chief executive Richard Gray, suggests that buyers and tenants are still looking to invest in coastal properties despite the current economic climate.
“In spite of the challenges presented by the Covid-19 pandemic and economic uncertainties, we have seen a robust market in many of the coastal towns we serve. Buyers and tenants are still interested in coastal properties, and we’ve seen strong demand across a range of property types, from apartments to luxury homes.”
Harcourts’ data also shows that many coastal towns experienced an increase in the average property price during the summer holiday season.
Agents noted that there was a particular interest in properties that were close to the beach or had sea views, as well as those that offered good rental potential, Gray says.
“This is in line with previous years, where such properties have been popular among holidaymakers and investors.”
Apart from the usual holiday market, Harcourts observed semigration continuing to provide a strong push to coastal towns. Most coastal towns are within 90 minutes of the closest airport, making them within reach of most business hubs in South Africa. He says many families have, and continue to, relocate to coastal towns around the country, driven primarily by safety concerns in the large metros as well as the quality of life provided by coastal towns.
General infrastructure improvements in many coastal towns have also kept up with the influx of buyers and families, with more shopping, recreational, medical, school, and business facilities.
“Semigration has been a driving force behind the growth of the coastal property market in South Africa.
“It’s no longer just about buying a holiday home, it’s about investing in a new lifestyle. We’ve seen an increase in demand for properties that offer more space, better security, and access to quality amenities,” Gray says.
To find a property to buy in one of South Africa’s coastal regions, visit IOL Property.