Eastern Cape attracts homebuyers with enviable coastal lifestyle
More affordable than its coastal counterparts - the Western Cape and KwaZulu-Natal - the Eastern Cape is one of the most popular provinces in South Africa for semigrants and first-time buyers looking for properties that fit their budget, and offer a high-quality lifestyle.
According to Lightstone data (Dec 2022), house price inflation in the Eastern Cape, at 5.65%, is marginally higher than in the Western Cape. This is most likely being driven by demand from homebuyers who are relocating from Gauteng and other parts of the country. These buyers are distributed across the full range of age groups, from young first-time buyers to retirees.
With many different property types on offer - from sectional title homes and apartments in new developments, to freestanding houses and properties on beautiful lifestyle estates - the Eastern Cape property market has a lot to offer. Carl Coetzee, CEO of BetterBond, says, "You can see why this part of the country has become a popular semigration destination. BetterBond data for the 12 months ending in March shows a 3% increase in bond approvals for first-time buyers in the Eastern Cape. The average purchase price of a first home has increased by 3%, but at an average price of R922 523, it falls well within the R1.1 million transfer duty threshold and therefore represents another reason why the Eastern Cape is such an attractive option for aspirant homeowners."
This province is also popular with retirees looking to downsize while not necessarily wanting to downscale in terms of value or location. Coetzee says, "With an average purchase price of just over R1 million, according to BetterBond home loan application data for March, the Eastern Cape housing market is attractive to investors and buyers wanting to add a second home to their property portfolio. While the demand for properties in many of the larger metros has fuelled house price growth in this province, there are also signs that the local residential property market will continue to thrive."
The value of building plans passed and completed in the Eastern Cape has doubled in value since the pandemic, and nearly trebled since 2013, according to data from the latest BetterBond Property Brief. "These numbers are used as indication of new properties coming onto the market," Coetzee says.
As the country's second largest province, after the Northern Cape, the Eastern Cape is home to 11% of the national population. Much of the building activity is happening in the larger municipalities, where the average annual increase in the value of building plans passed between 2013 and 2022 is 12.5%. Lightstone data shows that while annual house price inflation in the Nelson Mandela Bay Municipality may be easing, at 6.1%, it still outperforms other coastal metros. In the City of Cape Town, annual house price inflation is 3.3% and in eThekwini it is 3.6%.
The Eastern Cape has much to offer by way of lifestyle and economic opportunities. In addition to abundant wildlife and natural beauty, including a long and beautifully unspoilt coastline, it is also a commercial and manufacturing hub that offers plenty of opportunity. Trade data from the Observatory of Economic Complexity shows Gqeberha exported more than R100 billion in goods last year - mainly motor vehicles, manganese and iron ores, catalytic converters and wool - and East London R50 billion. Multinational companies including Coca-Cola, Anheuser-Busch InBev, Volkswagen, Ford, Continental and Goodyear, among others, have invested in local production facilities in Gqeberha.