Knysna has seen dramatic capital appreciation in this popular coastal town over the past 4 years.

"We have seen capital appreciation of 25% to 30% per annum on Thesen Islands, although it is down to about 12% to15% presently. Sparrenbosch and Pezula have averaged 15% to 16% over the past 4 years as well as in 2007. The rest of Knysna has stabilised on 7% to 8%, with corrections in over-priced houses," says Coen Bezuidenhout, managing director of Seeff Knysna.

"The National Credit Act (NCA) as well as the increase in the interest rate has had a negative impact on the middle and lower-end property sales. We are, however, expecting an improvement in the market during the middle of 2008."

Bezuidenhout says he is experiencing an increase in buyers from the big cities in South Africa, especially Gauteng.

"Lifestyle and security are the main attractions, with capital growth as an added bonus. Knysna is also a popular destination for international visitors, who make up a large percentage of our sales – paying in international currency is also pushing up prices.

"Due to the growth in the property market over the past 4 to 5 years, developers have been active in their supply of high-end, upmarket residential homes. A new development in Knysna will soon be marketed with prices from R395k to R1,8m for freeholding stands of approximately 850sq m to 5,000sq m."

He adds a caveat: "Although we are expecting another very good selling season over the Christmas holidays in our prime estates, over-priced properties in traditional Knysna neighbourhoods will be under stress to sell."

For more information contact Coen Bezuidenhout on 083 286 3727 or send an email.

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