Promising Port Elizabeth on a steady rise
10-09-2007
From the R116-million upgrade to its beachfront to the multi-billion rand Coega industrial development zone and deepwater port 20km up the coast, Port Elizabeth's economic rise is steadily spilling over to the property market.
Once considered the 'Cinderella' among South African cities, Port Elizabeth is now beginning to reap the rewards of investor confidence as the city repositions itself as a growth node both in terms of industry as well as tourism, notes property economist Erwin Rode of Rode & Associates.
Says Rode: "The proposed 13-year redevelopment of the beachfront by the municipality has assisted in triggering an annual property price growth rate between last year and this year of 30% along this stretch of coastline more than double the average for the country as a whole."
This in turn is bringing extensive private investment interest into the area, including a five-star hotel and talk of a convention centre.
The Airport Company of South Africa (ACSA) reported a 10,4% growth in passenger traffic through PE Airport over the previous year and is planning an extension to its runway system. Experts currently predict that foreign tourists to the region could jump from the 428 000 who arrived in 2005 to 750 000 by 2015, while domestic tourism could increase from 1,9-million to a phenomenal 4,3m over the same time-frame.
In addition, the city's Mandela Bay Development Agency formed in 2003 to revitalize PE's inner city and adjacent harbour area announced its plans last year to turn the harbour into a vibrant waterfront including hotel, leisure and residential components, once Portnet's existing oil tank farm and manganese ore loading facilities are relocated to the Coega industrial development zone. Notes Rode, "Residential developers are also beginning to eye the Central district as a desirable area for rejuvenation in view of the tax incentives being offered to redevelop existing buildings and construct new ones but the risks remain high."
According to local PE agent John Price of John Price Estates: "There is an enormous run on townhouses and other properties for buy-to-let investment purposes at present, and most of the investors are not from Port Elizabeth. Eighty per cent of our townhouse sales are currently to 'out-of-towners'.
Price further notes that, from the very low economic base of a few years ago, the economic growth taking place in the area is above what even the most optimistic Port Elizabethan could have dreamt of.
