Lightstone’s latest property market report for 2023 revealed that the Eastern Cape is one of the most undesirable provinces in the country – especially for those in the job market.

However, it still holds great potential for what it offers as an in-demand holiday destination.

According to Lightstone, slow population growth, a high proportion of non-economically active people, and a significant rural population characterise the Eastern Cape’s unfulfilled promise, as does the province’s underperforming residential property market.

The Eastern Cape’s contribution to South Africa’s national GDP has been falling since 2011, and the province has the country’s highest level of unemployment. Manufacturing is the largest economic sector, followed by construction, with relatively little mining activity.

This is a notable concern for those looking for the best job opportunities in terms of pay and standard of living.

A high proportion of non-economically active people

More evidence of those leaving the province is evident in its population demographics.

The Eastern Cape is South Africa’s second-largest province by size and fourth largest in population at 6.7 million people – but its population grew by just 2% over the past 11 years compared to the national average of 17%.

Looking back over more than 20 years, the Eastern Cape’s share of South Africa’s population has fallen from 14% in 2001 to 12.6% in 2011 and down to an estimated 11% in 2022, according to StatsSA.

While the province has a declining population – mainly because job seekers leave for other provinces, particularly the Western Cape – more than a third of those left behind are children (the highest proportion in the country). Lightstone’s data showed it also has the highest percentage of older people (11.6% compared to the national average of 9.2% and 10.7% in the neighbouring Western Cape).

This means that the Eastern Cape has a very high proportion of non-economically active people.

The infographic below shows how the Eastern Cape lags behind Gauteng in the proportion of adults aged 25-39 but outstrips Gauteng in terms of children under 14 and the elderly.

Little earning potential

There are 1.7 million households spread across 33 municipalities and 114 towns, with 50% of adults and 55% of children living in rural areas. The household size in rural areas is 4.5 people per household compared to 3.5 people in urban areas.

The data showed that rural households earn less than urban ones: 60% making less than R12,000 a month are in rural areas, and only 10% of those earning more than R12,000 a month are from rural areas.

The Eastern Cape is one of the poorer provinces, with nearly 80% of the population living in areas where the average income is under R12,000 per household per month. This compares to less than 60% in Gauteng and 50% in the more economically prosperous Western Cape.

This evidence of little earning potential is illustrated in the graph below.

The province has the potential for holidaymakers

Despite its economic challenges, Lightstone noted that the Eastern Cape has some of the world’s best beaches and 800km of unspoilt coastline which could be the basis of an improved tourism economy.

The Eastern Cape’s major cities, Gqeberha and East London, along with the famous surfing town, Jeffrey’s Bay, accounted for 62% of the province’s residential property sales by volume in 2022 – but average sale prices were highest in smaller coastal towns buoyed by the second holiday home market and growing demand from remote workers keen for a better quality lifestyle, noted Lightstone.

The data showed that residential property sales transactions in the R200,000 and R20 million price band in the Eastern Cape amounted to R10 billion in 2022 – and while nearly two-thirds of the sales were recorded in the cities – average sales prices were highest in Cape St Francis (R2.4 million) and St Francis Bay (R2.1 million) followed by Sea View, Kenton-on-Sea and Port Alfred (around R1.5 million).

This shows potential for the province to attract investment into the province, as its small towns punch above their weight in property sales. The average value of houses in the province is highest in smaller towns, as the graph below shows.

---

Read: Think twice before just fencing off your property in South Africa