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New developments and sectional titles spurs first-time buyer demand in Gqeberha

13 Sep 2021
类似|咪乐|直播 近年来,我国推动区域发展的指导思想从重视地区各自发展、相互竞争,转向强调顶层设计,加强区域协调。

If you’re an aspiring homeowner looking to invest up to R1 million on your first property, Gqeberha (formely Port Elizabeth) in the Eastern Cape is a good bet. An influx of new developments means that entry-level buyers can gain a foothold on the property ladder by buying off-plan homes that fall below the threshold for transfer duties.

This new apartment in Walmer offers one-bedroom, one-bathroom and a covered balcony and built-in braai. It is selling for R699 million - click here to view.

“Affordability and accessibility mean that the ‘Friendly City’ is living up to its nickname when it comes to welcoming first-home buyers. Furthermore, a year of record-low interest rates has made it even easier for new buyers to invest in property,” says Carl Coetzee, CEO of BetterBond.

“First home buyers are now able to afford more than they did early in 2020 when the prime lending rate was at 10%. This increased demand has seen the average purchase price of homes for our first-time buyers in the Eastern Cape increase by 9% for July, year-on-year. The overall average purchase price for BetterBond applicants in the province has increased by 10% for this period.”

Despite this strong house price growth, Gqeberha has an abundance of new developments and sectional title options offering exceptional value for money, adds Coetzee. “Close to 40% of bonds approved for clients from Gqeberha for the 12 months ending in July were between R500 000 and R1 million, with R1 million being the threshold for the payment of property transfer duty.”

READ: SA's top performing housing market | 15 most popular suburbs in Gqeberha + asking price averages

Developments in Fairview, Walmer and Overbakens are ideally placed for those buying in the R750 000 price band, says Paul Stevens, CEO of Just Property

Properties of R500 000 to R750 000 account for the lion’s share of properties sold by Just Property between January and July this year. Similarly, 42% of properties sold in King Williamstown and 35% of those sold in Buffalo City fell within this price band. 

Gqeberha’s sectional title market is doing particularly well, says Erica Venter, Eastern Cape Sales Manager for BetterBond, with Lightstone reporting average prices in 2021 of R789 000.

“This is in line with our data which show that 74% of BetterBond’s applicants in Gqeberha are first-home buyers, and the average age is 36 years old. Also, 62% of our applicants are women buyers.”

Click here to see all the latest trends data for Gqeberha.

In August 2021, searches for properties in Gqeberha on Property24 received over 4 million page views, and between May and August 2021, the city received over 11 725 million page views.

Gqeberha has currently *741 new property listings, according to property24 Trends Data, with the average asking price for the area being R1.1 million. The average sale price per erf for 2020 was about R800 000, while Section Scheme Units for the same period is about R710 000.

Demand for modern, two-bedroom units 

The demand for modern, two-bedroom units close to schools and major transport routes seems to be “insatiable”, she adds. For every successful bond application, there are on average five other pre-approved buyers in line for the same property. “One gets the sense that buyers are purchasing properties almost as quickly as developers can build.”

Furthermore, Stevens says the Eastern Cape market is fueled by previous tenants who can now buy for much the same monthly cost as they can rent. Historically low-interest rates means that many tenants are opting to buy property instead of paying off their landlord’s bond by paying monthly rental.

READ: Tenant affordability remains an issue for SA's rental market

“This shift from renting to owning a property also reflects an emerging trend where particularly younger people have decided to take control of their finances by investing in property at a younger age. COVID-19 has made us aware of the risk of being financially vulnerable. However, property has proven its resilience even during challenging economic times, and an investment in a home allows for greater control or ‘ownership’ of one’s long-term financial future,” says Coetzee. 

“The current prime lending rate of 7% means that buyers can afford up to 30% more than they could 18 months ago. It also means that for many, it may be cheaper to buy than rent,” says Coetzee.

The average monthly rental on a R1 million property is about R7 800. Meanwhile, at a prime lending rate of 7%, the monthly bond repayment on the same property would be comparatively less at R7 753. There are of course additional costs associated with owning a house, but there is also the benefit of having a fixed asset, says Coetzee.

Green Leaf Estate, a secure residential development in Fairview will offer two bedroom units priced from R733 000 to R809 000 - click here to view.

Research in the UK has found that lifetime renters will need an extra £9 000 of annual income to cover their rental costs, compared with homeowners. This means that they will need to save twice as much into their pension to cater for that period when they are no longer earning a salary.

“Similarly in South Africa, perennial renters will end up spending money on monthly rental costs that could have been used to save towards their retirement. With the interest rate at its lowest in more than 50 years, there has never been a better time to apply for a bond, and to do so from an earlier age,” says Coetzee.

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*Property24 Listings Data Disclaimer: The trends detailed in this article are based on Property24 listings, current at the time of publishing, and property transfer data supplied by Deeds offices, which typically take 3-4 months to reflect. Suburbs are listed according to Property24's geographical database. In some areas this will include both commercial and residential properties. The age demographic data of buyers, sellers and stable owners is determined over a six-month period.  These Property Values should not be used as a substitute for independent professional advice and is subject to Property24.com Terms and Conditions.

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