21 Sep 2010
“Many new developments have sprung up around Bela Bela in the past few years as it became an increasingly popular holiday and weekend destination,” says Tjaart Oosthuizen, co-owner of the recently revamped local Aida franchise.
“But these projects aren’t attracting much interest at the moment. Most buyers here are currently ‘bargain hunting’ for existing homes – even if they need renovation – rather than new ones. They are well aware that new homes currently cost around 20% more than pre-owned properties, and also that they can pressurise sellers to accept low offers because of the oversupply of stock.”
Bonnie Ingledew, Pam Golding Properties (PGP) area principal for Bela Bela, says currently there are too many developments and the market is overstocked with stands. “People are hesitant to invest in developments which are not completed. Houses on developments under R3m are selling, and obviously well-priced homes in well-known developments such as Mabalingwe, Sondela and Zebula are popular.”
She says people prefer to buy into an existing home as building costs are very high and they want a secure investment. “However, prices of properties already on the market are very high and sellers do not really want to reduce prices. Some new properties on the market are more realistically priced.”
Oosthuizen says the oversupply is rapidly being absorbed now, with the help of the assisted sales programmes for distressed owners that are being run by some of the banks. “Buyers of properties in these programmes are being offered bonds of up to 100% and a 50% discount on legal fees. In addition, the banks are negotiating reserve prices on these properties that are often well-below market value, so such deals are very attractive to potential buyers.
“Meanwhile, most of the development projects around the town have come to a virtual standstill and the fact that there is no new stock coming on to the market from this source is also helping to stabilise prices, which are currently back up at around pre-recession levels,” he says.
Ingledew says despite specific trends in Bela-Bela, properties over the whole spectrum are selling. “Houses in town are selling, albeit slowly and mainly in the price range from R700k to R1m. Stand sales are slow, but sell mainly in the price range from R400k - R700k (with stands on the market available up to R1,2m).
PGP is currently marketing small game farms covering 21ha from R2,2m; larger ones priced from R5m to R20m; lifestyle properties, lodges, guest farms up to R8m; and agricultural farms priced between R6m and R9m.
“Buyers are looking for lifestyle properties such as game farms to utilise over weekends. As Bela Bela is a holiday town, buyers are looking for weekend getaway properties.”
Oosthuizen says he is “confident that the Bela Bela market is well into recovery and will see good growth over the next 12 to 18 months”. – Eugene Brink
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