DESPITE the economic crunch leading to at least a 50% drop in the volume of sales in the property market nationally over the past year, the Eastern Cape has proved the most stable of all the provinces in these trying times.

Dr Andrew Golding, chief executive of Pam Golding Property, this week gave an overview of the property market over the past year.

He said this year had been characterised by a “fall-off” of at least 50% in the volume of sales, an extreme scarcity of bank lending finance and a marginal drop in pricing.

He said a further blow to the industry was that half the registered residential state agents who were present 18 months ago were now no longer in the industry. The numbers may have dropped by even more, supposedly from a high of 80000 agents two years ago to about 25000 at present.

In Golding’s experience, the “uber-prime market”, however, had continued to surprise him with its ability to “push the top end of the residential property market in South Africa to new levels”. He added that there had been well-recorded record sales in the country’s affluent suburbs.

“The rest of the market segments – the affordable housing segment, the so-called low-price segment, the mid-segment, as well as the high segment – have all performed in a similar fashion, categorised by a dramatic fall-off in volume of sales; a moderate reduction in prices – probably in the order of 10 to 15% over an 18-month period; a marked reduction in the ability to secure mortgage finance and as a result a trend towards much higher equity property sales; and a requirement for cash deposits and generally a significantly higher percentage of cash sales than before,” said Golding.

The Eastern Cape and Garden Route had been the most stable over the past year. “While it has not experienced very many highs, it has also not hit the lows of other areas.”

But there are areas that have felt the recession’s effect, especially coastal areas like Jeffreys Bay, St Francis and Port Alfred “which have been struck by the lack of leisure buyers”.

Golding said areas which bucked the trend included Grahamstown, which had benefited from its schools and university. Where there were good education facilities, there was usually a demand for property.

Kobie Potgieter, principal of Re/Max in the Bay, added that although prices had been affected by the recession, market activity was high. “Consumer confidence in the Eastern Cape is much higher than in other provinces.”

In September alone, her office sold 93 properties and had maintained a monthly average of 50 to 60 this year.

She agreed towns known for their holiday homes were severely affected. “If there is an economic downturn, this is the first segment to take the plunge.” In Plettenberg Bay, her agents sold only 49 properties throughout the year, while Knysna saw 69 sales.

Grahamstown did very well. “We had a development with 28 units and were sold out for R520000 each on the launch day.”

Independent Property Consultants principal Marion Engelbrecht said the recession had caused a decrease to a third of normal business at one stage, but that it was busy recovering. The section of the market that did the best according to her was the R500000 to R900000 middle-segment.

PE Regional Chamber of Commerce and Industry chief executive Kevin Hustler said stability in the province’s property market was a positive sign that investment in it – with careful selection of the right areas – remained a good long-term choice.

On the other side of the scale was KwaZulu Natal, which Golding said was probably worst affected due to the high percentage of coastal properties.

Central inland areas had also been severely hit, but the market had survived in the Western Cape, mostly in Cape Town, while Gauteng had shown increased market share in all areas.