Interest in Eastern Cape properties surges

"Demand is picking up again. More people are visiting properties and putting pen to paper. The amount of deals going through is up about 25% from last year," said Rademeyer.

"Nationally the trend seems to be that a house sits on the market for four months before being sold, but here, if priced correctly, we are seeing properties move in two months or less."

Business is booming

Rademeyer said Nelson Mandela Bay remained the province's economic powerhouse in terms of residential property demand and interest among buyers has jumped to more than 20% so far this year.

For Rademeyer, business has doubled when compared to the same period last year - a trend that was being experienced throughout the city to varying degrees.

He said, "I deal with a lot of agents in town, and many experienced a record month in April, which shows business is finally improving since the recession."

The upward trend was reiterated in the 1st Quarter 2013 FNB Estate Agent Survey, which showed a noticeably stronger picture of domestic residential property demand nationally than the preceding quarter.

St Francis bay rises from the ashes

The exclusive Eastern Cape seaside resort of St Francis Bay is one of the unlikely players in the region's residential property market turnaround, after devastating fires gutted 75 properties on the town's pristine canals in November 2012. According to Rademeyer, the town is experiencing a property market boom thanks to the funds from insurance companies to rebuild the gutted properties.

The town's property values are rising again as builders stream in for the construction of newer, modern homes along the sought-after canal. Some of the homes razed were valued at between R4-R6 million. This did not include the value of their contents.

This rejuvenation has made the town one of the province's key property investment areas, Rademeyer said. "There is a definite property boom in St Francis Bay since the fires. The whole area's property market has been dead since the recession in the late 2000s. Back then the first property people got rid of was their luxury homes," said Rademeyer.

"Now that we're coming out of the recession, people are again looking at investing in lifestyle properties. Added to that trend is the economic growth because of the rebuilding. Contractors in the town have work and there is an influx of capital into the area. Sales in that area are picking up again."

A buy-to-let market

The Nelson Mandela Bay property market was still tough for young professionals to enter - having to get credit of R800,000 or more - banks were once again allowing bonds of 100% with costs for first time buyers. "Their [first time buyers'] credit scoring needs to be excellent. If the bond does not include costs, buyers will also need to have saved about R40,000 to cover deposits and transfer costs. Not a lot of young professionals have that kind of money.

"In the past banks guaranteed a 108% bond, but they are stricter about that criteria now," said Rademeyer.

This meant an increase in people choosing to rent, rather than buy - and a subsequent uptake in people specifically buying homes to rent out, Rademeyer said. "There's been about a 10-15% year-on-year increase in buyers purchasing a second home specifically to rent out," he said. "This is still a buyers' market and smart investors are realising that things are about to change and that house prices are on the rise again.

"They are snapping up houses now, while prices are low, mostly to rent out because of the strong rental market. But they will sell as soon as the property market picks up again.

"I tend to see investors buying in the lower bracket, at around R500,000-R600,000, as then rental will usually cover or nearly cover a bond repayment."

Rademeyer said statistics showed that rental in the bay ranged from R5,000-R7,500. "Average rental in Port Elizabeth has increased from R4,800 in January 2012 to R5,200 in March this year," said Rademeyer.

For more information, go to www.jacorademeyer.co.za.