“There are many people who do not necessarily want to leave the country, but do want to get out of inland areas like Gauteng,” said First National Bank property strategist John Loos.
“With Port Elizabeth, George and East London all having airports, I predict there will be an increase in people living in coastal towns and commuting on a weekly basis.
“In a few year’s time there will be a significant rise in these high-end commuters.”
Loos said a general “lifestyle deterioration” was one of the main reasons for semigration.
“Even if you just look at the densification of a city like Johannesburg and the crime rate there, your quality of life is definitely affected,” he said.
Dave Callaghan, of Pam Golding Properties, has noticed an increase in semigration.
“We‘ve had a lot of people from Johannesburg looking for property in the province.”
Another Bay agent, Ian Olivier, said he had experienced growing interest in the Eastern Cape from other provinces.
“The current property situation is definitely not a ‘doom and gloom‘ scenario – it‘s really just a readjustment of the market.”
It seems the province‘s property market is in no dire straits, despite FNB‘s Residential Property Barometer painting a gloomy picture of the national property market last week.
The barometer is based on a national quarterly survey of estate agents who rate residential property market activity levels in their areas from one to 10.
Combined data from FNB for the last two quarters for the Eastern Cape indicated that while the national activity level was at 5,03, the Eastern Cape was slightly higher at 5,8.
First-time home buyers entering the market nationally this year were at 16% – a drop of 3% when compared to the last four months of last year.
But in the Eastern Cape, the number of first-time buyers is now 11% – 5% under the national average for this quarter.
Loos said the deteriorating national ratings were “not surprising and were indicative of tough times ahead for the residential property market”.
In addition to climbing interest rates, many agents had cited other reasons for the market decline.
“There has been a lot of frustration with the country‘s power crisis and decisions taken at (last year‘s ANC conference) in Polokwane caused a lot of uncertainty,” Loos added.
This meant that first-time buyers countrywide were particularly careful when buying property, while an increase in the number of emigrants was saturating the market with properties.
However, Loos said the Eastern Cape property market was now stronger than that of Durban.
“The Eastern Cape sees cyclical demand. It‘s not essential to buy a holiday home, so you may see a decline in the market in that respect,” he said, adding that the market should settle down towards the end of the year.
Olivier agreed the province was experiencing a buyers‘ market.
This tallies with FNB‘s data, according to which 83% of sellers in the last two quarters have had to accept less than their asking price.
“Sellers have had to be more negotiable with their asking price,” said Olivier. “Interest rates have had a negative impact on the market, but what goes up must come down.”
Olivier advised that buyers should “cushion” themselves when applying for a home loan.
“Buyers should qualify themselves 1% to 2% above the interest rate so they can afford a possible increase in the interest rate. This may mean buying a house for R470000 instead of R500000.”
Olivier said the lower end of the market was the hardest hit at present.
“It is quieter on the lower end, but there is still a lot of activity on the higher end, with buyers not being negatively (affected) by the rates increase.”
Callaghan agreed, saying: “There has been a dip in interest, but that is seen more in the lower end of the market than in the upper end.”
Anthony van Rensburg, of Sotheby‘s in Uitenhage, said he had seen potential buyers being more picky about prices in the Eastern Cape.
“We do need to get through this dip, but the market is cyclical,” he said.
Loos, too, is confident the market will stabilise soon.
“Once the fear of the political situation and the energy crisis subsides and life goes on, people will settle down, which will help normalise the market,” he said.