It seems as though the property market is recovering from the 2007/2008 slump. Port Elizabeth was hard hit by the recession the country experienced in 2007/08, resulting in distressed properties being sold just to be rid of debt burdens incurred through the recession. This is beneficial for young first time buyers, if they have accumulated sufficient down payments.
The reason for property being so affordable nowadays is due to many cash strapped home owners downscaling to reduce masses of debt. There is thus stock, movement and inflation within the residential property market, making for favourable trading.
The bond repayments are very similar in cost for the market compared to rental property.
This phenomena is also favourable for property investors within the holiday home market and the pure investment market. This in turn relates to rental income being favourable and will continue to strengthen when interest rates are to increase and banks tighten their lending policies once again.
The other factor to consider within the rental market is the shortage of new development in Port Elizabeth. This shortage of rental property could drive prices up as the demand rises. It could be a situation where rental income exceeds bond repayments.
This could also have a knock-on effect on the resale value of property as demand in this segment will also be under pressure from a shortage of stock. The more investors demand this rental income investment, the higher the prices will be driven by the demand. An increase in interest rates could stabilise this over inflated market frenzy in time. Until this happen it is now a favourable time to investigate the prospects of that holiday home in the windy city.
A point that is noteworthy would be distressed properties that could be in a state of disrepair while the offset cost of repair against the rock bottom prices is favourable.
Why not take a tour down to Port Elizabeth, courtesy of our website. Browse the many distressed and repossessed properties on offer with Myroof.