SECOND HOME MARKET SEES UPTICK IN ACTIVITY

While many complain of the effects of the recession, there is no segment in the property market that was harder hit than the second home market, and understandably so. But, says Warwick Heny, Broker/Owner of RE/MAX Kowie situated in Port Alfred, the market has definitely turned in 2010 and we are seeing a lot more interest in the second home market.

"Last year sales were slow and few and far between. In fact, they dropped by about 25% year-on-year since 2006," says Heny, whose office also operates in the Kleinemonde area, about 15km east of Port Alfred on the Eastern Cape's Sunshine Coast.

He says that there are definitely good bargains to be found, if buyers look around. For example, RE/MAX Kowie has this "fixer upper" home on its books selling for R599 000. It includes three bedrooms, two bathrooms, large grounds, and a single garage.

Heny says this property offers exceptional value for money, and there are other properties with similar features in the area that are selling in the same price band.

Adrian Goslett, CEO of RE/MAX of Southern Africa, points out that the correct price of a property is determined only by what a willing buyer is prepared to offer a willing seller, and what the seller is prepared to accept for the property. "Gone are the days when the seller could be non-negotiable on the selling price. These days, buyers have done their homework and understand which property offerings constitute value for money. Those that represent a good deal - for both the buyer and the seller - will sell relatively quickly. Overpriced properties on the other hand, can sit on the market for months."

Within Port Alfred, buyers can expect to pay in the region of R550 000 for a two-bedroom, one bathroom apartment.  A beachfront apartment will set you back approximately R700 000 while a typical family home with three bedrooms, and two bathrooms usually sells around the R1,2m mark.

Heny says that larger homes in the affluent areas close to the beach sell between R2,5m and R3m, while homes in the Royal Alfred Marina fetch anywhere from R3m up to about R8m.

Looking at the future of property within Port Alfred and surrounds, Heny says that while it used to be purely a retirement town and a good holiday home location, Port Alfred is moving towards becoming an educational town like nearby Grahamstown or Stellenbosch.

"Stenden University situated within Port Alfred, currently has about 250 students. But, there are plans for expansion of this Dutch educational institution, and it could enrol up to 600 students in the next couple of years," Heny notes.

He believes that while Port Alfred will always remain a good holiday home locale - especially as a weekend getaway as it is well positioned between Port Elizabeth and East London - the expansion of educational institutions in the area will create a strong rental demand for student accommodation.

"The property markets in coastal and holiday home towns follow on from property trends in the city, and in line with the current uptick in demand for property in general, we are seeing a slow but steady upswing in the Port Alfred property market too," says Heny. "As the biggest town on the Sunshine Coast, which is now being actively marketed as a destination along South Africa's eastern coastline, we expect to see continued demand; however buyers will continually be seeking out good investment opportunities that represent good value for money."

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