You may not believe it, but property prices in different areas can have a considerable impact on one another: indeed, your favourite scuba diving lodge may appreciate or depreciate as prices inland vacillate.
Despite the activity in the market for houses for sale in Centurion, it is Johannesburg that seems to be the front-runner when it comes to determining the market prices in the property industry. It’s as if the thinking goes: “Well, if Jo’burg is doing it, why can’t we?” and if there is any fluctuation in the City of Gold, then six months down the line, Cape Town will see similar house price adjustments, which filter down from the wealthier areas into the moderately priced bracket. Durban can expect changes in a similar timeline, but Port Elizabeth experiences changes in the market only six to nine months after Cape Town. So if you’re looking to buy in a buyer’s market and want relatively priced, decent accommodation PE will be the place to buy.
House prices in Port Elizabeth
The Eastern Cape has some very beautiful property, especially the old settler homes in the centre of the town. The newer areas have adopted sophisticated architecture and relaxed interiors, providing top quality accommodation at affordable prices. At the moment, the market is relatively quiet compared to five or six years ago, and most of the buying and selling activity in the property market is in the bracket of R1 million and below. While Cape Town’s market may be hearing whispers of market improvement, it has yet to filter through to PE properties.
Unfortunately for homeowners who purchased homes in the 2007 boom time market and are currently trying to sell their property, they cannot expect to sell for more than they bought – they may not even be able to get their buying price and have to cut their losses if they’re being forced to sell. Average prices have fallen dramatically from those 2007 highs – anything from 10% to 35% of their original purchase price.
Current activity in the PE market
Homes in the affordable bracket are averaging at R750 000, with home prices in the middle to upper bracket averaging between R1 million and R2 million. While there is a lot of activity in many of PE’s neighbourhoods, it’s also true that the banks’ stringent vetting methods are resulting in many potential homeowners having their bond applications rejected. While they may have qualified for certain bond amounts before, they now qualify for less – if at all.
Real estate agencies in the PE area are warning would-be sellers to not get too optimistic with their selling prices; that they cannot expect to sell at yesterday’s buying prices (which were much higher). At the same time, they encourage would-be buyers to snap up the homes in more upmarket areas, saying that buyers will never again see prices as good as they are now.