MAIN IMAGE: Cicilia Janse van Rensburg, broker manager – RE/MAX Border East London
Kerry Dimmer
Recent headlines have raised concerns about the future of East London (Buffalo City), warning that the region could become a “ghost town” if Mercedes-Benz South Africa (MBSA) were to close its long-standing manufacturing plant. As one of the city’s biggest employers and economic anchors, the manufacturer’s potential withdrawal has sparked debate across industry sectors, but Cicilia Janse van Rensburg, broker manager of RE/MAX Border East London, says the situation is more complex than the doomsday predictions suggest.
How real is the “ghost town” scenario?
At a recent industry conference in Sandton, Mikel Mabasa, CEO of Naamsa, the Automotive Business Council, issued a stark warning about East London’s economic dependence on MBSA.
“East London could potentially face the burden of being classified as a ghost town if the Mercedes-Benz plant, an anchor of that local economy, comes to a grinding halt,” he said.
Although the terminology might seem dramatic, the core concern is justified: MBSA sustains thousands of direct and indirect jobs, and any sudden contraction would trigger ripple effects throughout the residential and rental markets.
Property market implications if MBSA downsizes
According to Janse van Rensburg, even a partial withdrawal would be felt immediately, “If MBSA were to withdraw or significantly downscale in the short- to medium-term, the market would likely face reduced demand for properties, particularly in the middle-income housing market, as well as rentals tied to employees and suppliers. This could induce panic selling. However, corporate rentals are likely to drop first. In the long term, one could expect knock-on effects such as reduced investor confidence and slower infrastructure or private development.”
She notes, however, that East London is no longer the single-industry town it once was.
A diversifying economy softens the risk
Janse van Rensburg believes the city has structural strengths that could help cushion the impact of any major employer shift.
“East London’s diversifying economy—including logistics, education, and port-related activities—could mitigate some impacts over time, especially if industrial zones and new manufacturing initiatives expand. New spaces could be created for other sectors to emerge as economic drivers and contenders for new growth, bearing in mind that the city is not tourism- or finance-led like Cape Town or Johannesburg but is primarily an industrial economy,” she says.
She highlights the city’s industrial and commercial ecosystem as a key driver of demand for residential properties. Growth nodes, such as Beacon Bay, Vincent, Berea, and areas around the CBD, remain important indicators of market health and investor sentiment.
Major investments are strengthening the region
There are several signs that East London is positioning itself for renewal rather than decline.
Media reports show strong interest in the East London Industrial Development Zone (ELIDZ), including:
- A R920-million energy investment by Thezi Langa aimed at boosting regional generation capacity and creating ±1,000 jobs.
- Ongoing discussions between the Eastern Cape Provincial Government and major international players such as BYD and CIG about establishing new energy vehicle manufacturing platforms.
In the 2023/24 financial year, ELIDZ secured nearly R580 million in private-sector investment, supporting job creation and driving demand for both rental and owner-occupied housing.
What the data says
Lightstone figures comparing year-to-date 2025 activity with 2023 show mixed but steady performance:
- R0 – R250 000: 128 vs 89
- R250 000 – R500 000: 120 vs 181
- R500 000 – R1 million: 282 vs 413
- R1 million – R1.5 million: 222 vs 321
- R1.5 million – R3 million: 287 vs 396
- R3 million+: 57 vs 76
The trend reflects a market that is stable but price-sensitive.
“The East London market remains relatively stable but price-sensitive, with moderate demand in the residential sector and steady activity in entry- to mid-level price bands,” says Janse van Rensburg.
She adds that the R900 000–R2.5 million bracket continues to show the most activity across suburbs such as Beacon Bay, Gonubie, Amalinda and surrounding areas.
“High-end properties have experienced slower turnover, reflecting national trends associated with higher borrowing costs and cautious consumer sentiment. First-time buyers and semi-urban semigration from other Eastern Cape towns continue to provide a steady flow of activity.
Overall, while growth has been modest, East London remains more affordable than larger metros, offering strong relative value, especially in the extremely active rental market where demand is high for secure lock-up-and-go and student/young professional zones.”
What locals think
A survey conducted at a recent major conference in East London showed that most attendees maintained a cautiously optimistic outlook. Even with uncertainties around MBSA, participants expressed confidence in:
- The city’s relative affordability
- Its economic diversification
- The long-term investment potential of key growth nodes
The consensus is that East London remains resilient and offers value, particularly for long-term investors prepared to look beyond the headlines.
