Port Elizabeth Distressed Properties Selling Fast

Buyers are moving fast to take up the supply of distressed properties in the Port Elizabeth market, and sales are brisk in the whole R400 000 to R1,2m price range as a result.

So says Charlotte Vermaak, sales manager of the Chas Everitt International office in the city, who estimates that 30 to 40 percent of the sales taking place currently are of distressed properties – some of which are those being sold under the various bank assistance programmes that help owners keep their credit records intact.

"The most popular are family homes in the R700 000 to R900 000 bracket, which are being bought by medium-income buyers seeking good value for money and keen to access the favourable financing arrangements that the banks offer on such properties," she says.

"At the same time, many sellers of these properties are deciding not to go into the rental market, but to simply downscale to smaller, more affordable homes, and this is boosting demand in the R400 000 to R700 000 bracket. There is a shortage of rental property in Port Elizabeth and in many cases it is easier and makes more sense to buy again, especially with interest rates at their current levels."

Meanwhile, Vermaak says, there is also more activity now in the R900 000 to R1,2m bracket as increasing numbers of existing homeowners also take advantage of the low interest rates to upgrade to bigger and better homes or more central areas with better access to their workplaces and the schools they favour.

"Suburbs such as Lorraine, Parson's Vlei, Westering, Kabega Park and Richmond Hill, particularly, are experiencing good sales volumes at the moment because of these trends, with Lorraine, for example offering a whole range of properties for those moving up or down the affordability scale."

In fact, she says, the Port Elizabeth market overall is gaining strength, even though production in the city's main industries and business sectors have not yet returned to pre-recession levels.

"However, it is important to note that because there is still a substantial oversupply of properties for sale, we are not expecting prices to show any significant upward movement for some time yet.

"And the same goes for rentals, even though there is a shortage of stock and high demand. We have 20 to 25 applicants for each rental unit that becomes available now, compared to 10 applicants two years ago but landlords, it seems, would rather keep existing tenants now than raise rentals and risk losing them.