Coega fails to deliver property boost

The Coega harbour project just outside Port Elizabeth, once expected to give the surrounding area a huge economic lift, has yet to bring about any significant increase in local property demand.

That’s the news from Adele Meusel, principal of leading local agency Homenet/ Harcourts Anchor Realtors, who says that the local property market has remained largely unaffected by Coega and that activity in the suburb still stems predominantly from family buyers.

The first phase of the Coega deepwater harbour is officially due to open later this year and much of the surrounding construction has already been completed. A number of businesses have also moved their offices to the port area. But the world economic crisis, which has led to a dramatic fall in shipping volumes, has put a kink in plans for further development and some R1bn worth of Coega projects are now on hold.

“It was initially envisaged that Coega would, at the very least, drive demand for rental property in our area but related demand has been minimal,” says Meusel. ”Similarly, Coega companies have shied away from purchasing property in the area as many simply cannot afford to subsidise their employees or grant company loans. Hopefully the demand will increase once the port is operating to capacity and the economy improves.”

For now though, Bluewater Bay remains very much a family-orientated area complete with good schools, a river, beachfront and two upmarket retail nodes. The suburb is also relatively crime-free area and offers a variety of outdoor activities as well as easy access to the Addo Elephant Park.

Property prices range from R700 000 to R6m. Most sales currently are occurring in the R700 000 to R850 000 bracket with the majority of purchases stemming from those who have sold their previous homes and can put down substantial deposits. According to Meusel, many families are also now pooling their resources to purchase homes that will accommodate two families.

Article by: www.homenet.co.za