Rental shortage offers opportunities in Uitenhage
The town of Uitenhage, 30 minutes outside of Port Elizabeth, has been experiencing a shortage in available rentals, offering an enticing opportunity for investors and developers to earn good yields on properties bought for the purposes of long-term letting.
“Uitenhage is a good investment because you have something of a captive market,” says Vian Tee, principal at Jawitz Properties Port Elizabeth. Tee and business partner, Brad Dowlman, took over the franchise of Jawitz Properties in the area earlier this year. “VW South Africa’s assembly plant in the region employs thousands of people from the level of factory workers to executives, generating a large market for rental housing across the purchasing power spectrum.”
This, combined with the high value for money average purchase prices in the area, makes Uitenhage potentially rewarding for property investors. The average purchase price for a four bedroom, freehold home currently stands at R800 000 to R850 000. A home of this type can generate an estimated R8000 monthly rental.
Tee says the demand is high and growing.
The volume of existing properties available on the market as of February 2017, saw 764 properties available for sale in the town, up from 720 in January.
“More than 40% of new buyers in the area are between the ages of 36 and 49 years old, indicating a healthy middle class economy,” Tee says. “This kind of market lends itself to stable letting arrangements, as most people will be long-term residents.”
The area also boasts good schools and its proximity to Port Elizabeth offers residents a short commute into town, while still enjoying the pace of life in the country side – with cheaper house prices to boot.