If it is true, as is often maintained, that price levels in Cape Town residential property tend to lag at least half a year behind those of Johannesburg, it is probably also true that the Port Elizabeth home market tends to be another six to nine months behind that of Cape Town.
Certainly right now, says Verity Bigara, Rawson Properties’ sales franchisee for most of Port Elizabeth (where the rental division and the Motherwell area are served by other independent Rawson franchisees) the optimistic reports of a slow but discernible upswing now emanating from most Cape Town estate agents are not yet justifiable in Port Elizabeth.
Here, says Bigara, depending on the area, prices have dropped anything from 10 to 35% below the highs of 2007, giving an average price of R 750 000 for the affordable and of R 1 000 000 and R 2 000 000 for the middle and upper brackets.
The good news, says Bigara, is that there is still a great deal of sales activity in areas such as Newton Park (close to the city centre) and Lorraine (to the west of the city), where the average prices are in the sub R1 million bracket and where prices have already stabilized.
“Potential buyers of property in these and similar areas,” she says, “are abundant. However, it remains true that many here fail to qualify for bonds.”
Whatever the price and size of the buy, adds Bigara, it is essential these days for her staff to carry out careful initial screening evaluations because a high percentage of would-be buyers simply no longer qualify for a bond at their target levels – or indeed in many cases for any bond at all.
Similarly, she says, optimistic hopeful sellers who cling to yesterday’s prices, particularly in the more upmarket homes, in the hope that something special about their homes will make them saleable above market values have to be disillusioned time and again. In her franchise now, in fact, they have a policy of not accepting over-priced homes, having all too often found that they stick on the market for anything from six to 24 months.
At current price levels, says Bigara, any unbiased seller must accept the fact that the vast majority of Port Elizabeth homes, but again particularly those in the higher brackets, such as homes in Summerstrand, Walmer, Humewood and Millpark (where in these areas prices could range from R1, 2 million to R5 million), are now exceptionally good value and are on the market at levels that will very definitely never be seen again.
“With further 0,5% to 1% interest rate cuts almost certain to take place before the end of this year,” she says, many of those buyers in the property market who have remained hesitant or who appear to have lost confidence in property should be thinking again. Now is exactly the right time to buy if you want an investment, that five years from now, will look extremely good indeed.”
