Newcastle may only be South Africa’s tenth-largest city, but it’s thriving commercial and industrial sectors have ensured its status as a bustling economic hub, nonetheless. With consumer confidence taking a knock thanks to general economic and political uncertainties, however, some residents have been concerned about the city’s future prospects. This, amongst other factors, has resulted in a notable dampening effect on the local residential property market, but real estate experts are predicting a brighter future than present circumstances may imply.
“If you look at current property sales figures in Newcastle, you’d be forgiven for feeling a little disheartened,” says Marius van Zyl, the Rawson Property Group’s franchisee for the city. “The number of registrations has dropped significantly, and the median price has lowered as well, but there are a lot of positive indicators that we believe bode very well for future prospects.”
The most promising sign, according to van Zyl, is the ongoing investment in local industry. “Our industrial and commercial sectors have been the driving force behind Newcastle’s growth from a simple postal waypoint in the 19th century to one of South Africa’s main urban centres today,” he says. “Continued investment in those sectors shows that we have not yet reached our peak growth point, and new development will attract more employees and more satellite businesses to our city over time.”
The resulting increase in new residents, and improved work opportunities for those already in the city, should spark renewed interest in the property market. Positive growth in sectional title schemes – which tend to be popular amongst new city residents – may indicate that this trend has, in fact, already begun.
In addition to commercial development, van Zyl also draws attention to Newcastle’s growing tourism industry, targeted largely at visitors travelling between Durban and Gauteng.
“There has been a significant effort to bring the many historic and cultural attractions of Newcastle to the public’s attention,” he says. “The focus is mainly on the Transvaal War of Independence Battlefields Route, but other highlights are our annual events and festivals which include the Newcastle Air Show, the Hot Air Balloon Championships and the Vodacom Newcastle Winter Festival.”
This burgeoning industry has created a surge in demand for short term accommodation like hotels and B&B’s, and is encouraging interest from a whole new pool of potential property purchasers within the hospitality sector.
“With hospitality and industry both driving interest in Newcastle’s residential property, directly and indirectly, it’s only a matter of time before we see demand increasing once again,” says van Zyl. “When that happens, prices will start to rise, and investors who get in early enough are likely to see some very nice returns.”
At present, homes in upmarket Aviary Hill start at around R1 million, while the older suburbs of Barry Hertzog Park, Amajuba Park and Ncandu Park offer homes from an affordable R400 000. Properties in family suburbs like Hutten Heights, Pioneer Park, Schuinshoogte and Signal Hill range from R700 000 to around R2 million.
While the jury is out on how long it will take Newcastle’s market to bounce back from its current inertia, van Zyl remains positive that buyers will not regret informed purchases based on sound market advice.