Investing in The Underdog
Although Gauteng, the Western Cape and KwaZulu-Natal boast the highest populations when compared to other smaller provinces in South Africa, as well as rank high on the popularity poll and property performance – property investors and potential homeowners are now moving away from overly-developed provinces and are now looking to find their forever homes in the underdogs of provinces – especially the Eastern Cape.
In this article, we look at why it is a smart investment choice to take advantage of this province's property market which boasts more than 20 000 potential-filled properties which on average are priced at the R2 million mark and after some creative upgrades can sell at a considerable amount more. In this province, homeowners and investor can buy for less and sell for more – the ultimate rewarding province.
While the South African property market has forever seen coastal residences' inflation increase year upon year, in recent times, noncoastal properties have seen a
further increase and one which is slowly surpassing coastal homes. As coastal house price inflation continues to slow down, year-on-year sales in the Eastern Cape have increased by about 33 percent, with further growth intended for the near and far future.
One of the reasons for this province bucking the property trend is because of the black middle-class property investors who have exploded onto the property market. Another reason for the increase in price inflation in the Eastern Cape is due to the impressive growth in the local automotive industry – which the province is known for.
The black middle class, who are business savvy and financially fit, is also seeking to purchase homes for their relatives and parents who reside on the outskirts of the province – the piece of property being a sign of gratitude of course. There is also an increase in freehold property purchases, with the province offering an abundance of these freehold stands, unlike other provinces which only offer small dwellings one on top of the other.
Property sales have also increased here due to a variety of large infrastructural and property developments currently underway in the province, which is also set to bolster economic activity and employment creation. As one of the poorest provinces in the country, and one which once, unfortunately, possessed the poorest rate of those hired, this province will now see a rise in employment status – and an increase in the province's employment rate means an increase in the property sales and values.
Sandy shores and blue oceans have always been of great value and desire in the property market, with the pressure to develop more and more properties in these sought-after coastal regions ever increasing as the appeal of living at the coast becomes more prominent along with leisure activities associated with the blue,
However, with the natural state of the globe and coastal environment at the moment, and the coastal developments in Cape Town and KwaZulu-Natal becoming too squashed for living comfort, the underdog coastal provinces are seeing a rise in interest, with their coastal towns still slightly underdeveloped – with much space to grow and provide accommodation whether in permanent living or holiday homes and resorts. The property market, developers and investors and potential homeowners have now shifted their focus and needs away from intensively developed coasts to other favourable, although less populous provinces such as the Eastern Cape.
Why? Well, although its primary economic nodes of East London and Port Elizabeth are basically developed, the rest of the province is relatively undeveloped and offers a refreshing opportunity for the awakening property market – a market of investors who seek increased consumer spending power, increased mobility and more leisure time. And another positive to note is that with the Eastern Cape, there is unique opportunity here for
And another positive to note is that with the Eastern Cape, there is a unique opportunity here for property developers to learn from the mistakes and non-environmentally friendly properties of KwaZulu-Natal and the Western Cape. From this, developers in this province can now design and develop new 'green', light footprint properties in this coastal region which will ensure a very sustainable path for long-term development in the future as well as reduce the negative impact on
the coastal zone.
It is believed with all this and a large new wave of economic investment, together with new government leadership, the property market will notch up the already evident inflation increase in the province and bring about a new bout of growth.
Once the underdog, Eastern Cape is set to become a formidable contender among the urbanised provinces and getting into the property industry now would render high profits and celebratory return on investments when choosing to sell a property located here after a few years. Property prices are lower now, and the array of property opportunities is endless, so investors and homeowners would do well for their abundant futures to get in now while the prices are average and the potential is sky high.
Interesting facts about the eastern cape
- Capital: Bhisho.
- Known as South Africa's 'Wild' province and the water sport capital of South Africa boasting a host of local and international local water sport events.
- Two largest cities: Port Elizabeth and East London.
- Area: 168 966 km² of land cover – second biggest province in the country.
- Population: 14 per cent share of the country's population.
- Geography: The west is semi-arid Karoo while the far south is temperate rainforest in Tsitsikamma region. Rugged coast with interspersed beaches. Most of the province is hilly to very mountainous between Graaf-Reinet and Rhodes, while the region between East London and Queenstown is lush grassland on rolling hills.
- Climate: Varied. The west is dry with sparse rain and hot summers. Further east, plentiful rainfall and humidity increases. Interior is very cold.
- Economy: Subsistence agriculture predominates. Share of total South Africa's GDP is 8.1 percent. Gross regional product is more than R88 billion.
- Divided into 37 local municipalities and two metropolitan municipalities.
Quality of life & cost of living
Cost of living drops drastically when moving to a small town or quieter province from a busy, developed city. Eastern Cape's cost of living is radically reduced from other over-populous provinces such as Gauteng, KwaZulu-Natal and the Western Cape. Eating out, buying groceries, visiting excursions and entertainment hotspots are lower in cost and basic living expenses such as rent, levies and water and electricity are much lower in the Eastern Cape.
Purchasing a property is also more achievable in this province when compared to property price tags in well-established provinces. On average, properties within the Eastern Cape are lower in price. Houses within the Eastern Cape are as varied as they are priced – making this property playground perfect for both the most discerning of savvy investors and the new homeowner on the block.
While a lower cost of living in this province may allow potential homeowners and investors to enjoy a more stress-free lifestyle, the slower pace and fewer amount of facilities and amenities which boost quality of life may find homeowners trying driving a little further to enjoy happiness out of the home, but there are still shopping centres, churches, hospitals still at convenience reach. If peace and quiet and a refreshing break from the extreme hustle and bustle of city life is what is sought after than this province is the perfect home sweet home for property investors.
DRAWCARDS FOR PROPERTY INVESTORS TO ENJOY
- Education at the most-recognised top schools and universities such as Rhodes University and Nelson Mandela University.
- Many tourist attractions including 800km of pristine coastline, big seven viewing including buffalo, elephant, leopard, lion, rhino, great white shark and southern right whale, Addo Elephant National Park, Tiffindell snow skiing resort, National Arts Festival, Bloukrans Bridge Bungee, the Wild Coast, Whittlesea's wine estate, Jeffreys Bay, Orange River.
- A province which focuses on responsible tourism and conservation – underpinning sustainable development of the area. Actively pursuing equitable low-carbon economic growth through innovation. Protection of the environment for the benefit of present future generations through reasonable legislative and other measures which prevent pollution and ecological degradation.