The property market in East London has just about everything a first-time buyer could wish for – affordability, lifestyle amenities in abundance and many new developments to choose from.
And, says Clinton Krouse, owner of the Chas Everitt International franchise in East London, that fact has been very clearly reflected in a steady volume of sales over the past 12 months, even though the fortunes of the local market are still largely tied to those of the manufacturing sector, which experienced a slowdown in 2015.
“Affordability is a big draw card for East London, even though people here don’t usually earn as much as in bigger cities. The latest Absa Housing review shows, for example, that even though the average house price here rose by more than 24% last year (2015 Q3 compared with 2014 Q3), it is still only the second highest among SA’s major metros at R1,38m – with Port Elizabeth being the lowest at R1,04m.”
The Absa figures also show that at the end of 2015, the average price of a small home in East London was R750 000, that of a medium-size home was R1,3m and that of a large home was R1,9m. By contrast, the average price of a small home in Cape Town, the most expensive metro, was R1,22m, and those for medium and large houses were R1,73m and R2,43m respectively, so it is no surprise that East London is an increasingly popular choice for young families and retirees, he says.
“This city also enjoys a laid-back, seaside lifestyle and we find that many people who were born and raised here but left to work in other cities are actually now returning in search of a less hectic schedule. These buyers generally opt for suburbs like Beacon Bay, Gonubie, Dorchester Heights and Nahoon Valley Park, all of which offer very good value-for-money homes and a wholesome environment in which to raise children.”
Of course it doesn’t hurt that the city is home to several of SA’s most highly-rated schools, and also boasts many great shopping, entertainment and sports venues, as well as both river and beach “playgrounds”, but even more important is the fact that the local economy is becoming more complex and starting to offer a more diverse range of job and business opportunities.
Meanwhile, Krouse says, the East London market, like that of many SA cities, is being boosted by rapid urbanisation. “It is the main catchment area for people relocating from the rural areas of the Eastern Cape and we are clearly seeing a changing demographic with more young people coming here to find work, get settled and buy their first homes.
“And thirdly, our market has benefited over the past year from a strong upgrading trend, thanks to rising prices at the lower end that have made it possible for many existing owners to sell at a profit and move up the property ladder. This may, however, become more subdued this year as household budgets come under pressure and new developments coming to market slow the pace of price increases.”
Indeed, he says, developers are very active in East London at the moment and are delivering sorely-needed new stock of all types and in all price ranges, but especially in the affordable housing sector.
“We are currently marketing a new development in Greenfields, that offers three-bedroom, two-bathroom townhouses of various sizes at prices from around R850 000, while other new projects now on offer include Gonubie Palms, Calypso Gardens, Umlele Heights, The Village in Kidds Beach, Cypraea Sands Estate and Balugha Estates.”
(Photograph: This three bedroom, three bathroom home is Nahoon is being marketed by Chas Everitt International for R3,2m.)