Increased interest in ‘live, work, play’ communities

2016-02-25 06:00

Steady growth has made Port Elizabeth property a “safe as houses” investment bet, with new developments matching national trends.

This is according to Just Property Group chief executive, Paul Stevens, who says increased interest in ‘live, work, play’ communities and robust rental returns make the city an attractive option for potential investors.

“The ‘live, work, play’ market is a growing trend all over South Africa and I see this as a very big thing to come to Port Elizabeth,” says Stevens.

“People are looking for convenience and affordability, so living close to all things that affect your life, such as work, shops and schools, is going to be a new way of living.”

He says gated communities provide added security and have proved highly successful elsewhere in South Africa.

Another positive is that rental returns and annual rental escalation in both Port Elizabeth and the Eastern Cape generally were the highest in the country, barring places such as the Northern Cape.

Stevens says property funds are also starting to take notice of the local residential market. There is interest from property and investment funds in acquiring residential property as a long-term investment to diversify their portfolios.

“This has been happening elsewhere in the world for some time now, so I see this as a positive factor for local developers. Last year, we saw the first transaction of this type in our city, owing to favourable returns.”

In general, the market has remained steady, but Stevens warns that negative factors continue to hamper growth.

He says these included tightened lending restrictions, climbing interest rates, increased living costs owing to the weakening rand and the threat of a 16% electricity tariff increase.

Despite this, Stevens says there was still “considerable activity” in the first-time homeowner market, with a growing rural to urban shift and increased demand for affordable housing in the R500 000 to R1.2 million price range.

“Property will always be a safe investment, as long as you do your homework,” he says.

-Property24

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