Real Estate Investor Magazine South Africa July 2013 | Page 49

COMMERCIAL
to varying degrees, he said. “I deal with a lot of
agents in town, and many experienced a record
month in April, which shows business is finally
improving since the recession.”

Coega’s market boost
With the take-off of business in the Coega
I ndu st r i a l D e v e lopment Z one , where
companies such as Famous Brands are setting
up R400 million factories and the anticipated
PetroSA oil refinery is mooted for the area, the
residential property market has been reignited,
Rademeyer said.
He said the developments at Coega had seen
an influx of wealth from outside the city – from
SA and abroad – as top businesses relocated top
experts to their operations at Coega.
This has seen areas like Uitenhage and
Despatch experience booms in residential
demand, as contractors move to the city for
projects at Coega. The trend has been even
more pronounced in the suburb immediately
bordering Coega, Motherwell NU5 and NU6,
said Rademeyer.
“There used to be uncertainty around Coega,
but now that it is taking off and people are buying
instead of renting,” he said. “With Coega, we are
going to see more of an influx of high earning
foreigners to the Bay.

“People from outside the city coming from
Joburg and Cape Town are interested in estate
living, where security is provided 24 hours and
there is a focus on holistic lifestyle qualities.
They are looking for big plots and house in
secure estates with homes going for R3-million
and over.”

Still a buyer’s market
The biggest growth in the Nelson Mandela
Bay market has been in homes priced up to
R1.5 million.
“This because people in that price range are
your middle-class salary earners. It’s easier for
these buyers to get bonds for the properties, as
opposed to self-employed buyers who struggle
more to obtain bonds. These buyers are usually
salaried employees with a combined household
income of about R35 000 a month – they can
secure these sorts of bonds,” Rademeyer said.
“That’s what is good about properties in
the Bay: you can a decent home with three
bedrooms, a double garage and sometimes even
a swimming pool for up to R1 million.”
Increasingly popular areas in the city include
the suburbs of Lorraine, Mangold Park,
Westering and Kabega where demand has
grown a massive 30 to 40% from last year.

Meanwhile, the R1.5 million to R3 million
house price range saw “a completely different
buyer”, Rademeyer said. “It is usually a buyer who
wants to upgrade on their lifestyle. The sellers are
under stress because they upgraded during the
boom years and overextended themselves and
now we see some of these properties being sold
at less than what was paid for during the boom.”
Although prices have remained stagnant, there
has been 20% year-on-year growth in demand
for these properties, he added. “I often say to
clients if they bought this type of property in
2006/7 and didn’t do major renovations, given
the recession, they would be lucky if they get
anything more than what they paid for it.
“ These homes a re genera l ly va lued at
the same price that they paid for it. These
properties generally sit for four months or
longer on the market.”
In the R3 million and over category, “buyers
generally don’t need bonds: they usually have
a big deposit or it’s a cash transaction,” said
Rademeyer. “Sometimes it ’s an upgrade
of lifestyle, so the deal is subject to selling
aother property.”
Activit