EAST LONDON BOOMing
It's boom time in East London as residential property owners cash in on increased rentals in the coastal city.
A rental index for December by property managers Trafalgar found that although rent was still cheaper in East London than in the big cities, rentals in the Eastern Cape town had grown by 13percent, beating the national average of 9percent.
An East London flat that would have been rented out for R2000 a month in December 2003 would now be rented out for R2731 - a 36percent increase.
The growth was boosted by young families and people who enjoy the coastal lifestyle who are flocking to East London and taking advantage of the fairly low rentals.
Trafalgar's index monitors rental growth nationally in cities that include Johannesburg, East London, Port Elizabeth, KwaZulu-Natal and Cape Town.
Andrew Schaefer, Trafalgar's managing director, said East London, which came off a fairly low base compared to other cities, was being continually discovered by commercial and residential investors.
Schaefer said the multi-billion rand Coega industrial development complex and deepwater port outside Port Elizabeth was important in the re-awakening of East London and Port Elizabeth.
The development is expected to become the logistics hub for Southern African trade.
He said: "The strongest growth is the rental demand, especially the demand for houses, although East London also has a significant corporate tenant base. Mercedes Benz's decision to establish themselves there is one of the best examples of the drivers of its growth."
Schaefer believes the city will close the gap and catch up in the next two to three years with other comparable coastal cities.
Novate Property Investments Triple Point mixed use development is one of the developments that aim to bring modernity to the city of East London.
Novate strategic development manager Grant Wheatley said government's increased spend on salaries had boosted the emergence of the middle class for the province and the city.
"We are based in East London and we wanted to bring what they want, which is the same things here as they would find anywhere else.
"As their incomes improve they also want the exclusivity of shopping in a boutique, and the choice of having the best of brands," said Wheatley.
Johannesburg's rentals rose just under 11 percent, pushing the rent of a bachelor flat in the northern suburbs that would have gone for R2000 in 2003 to R2900 a month.
Rentals in Durban rose by 9,2percent, Cape Town was up 8,5percent, and Pretoria lagged behind the major centres with a 5 percent increase.