Holiday property buying has risen to an estimated three percent as reported in the FNB Property Barometer on Holiday Homes.

According to the survey, in the second quarter of 2011, estate agents said there was an increase in holiday property demand relative to overall residential demand.

However, said John Loos, FNB Home Loans property strategist, this improvement is not strong enough to prevent the price performance of coastal holiday towns from remaining at weaker rates compared to primary residence-driven metro markets.

“From an estimated one percent around mid-2010, holiday property buying has risen to three percent at the second quarter of 2011 agent survey,” said Loos.

Loos explained that with the household sector having experienced tough financial times, holiday property buying remains on the backburner for many as they rebuild balance sheets.

According to Herschel Jawitz, chief executive officer of Jawitz Properties, the coastal leisure markets are still under pressure with supply outstripping demand.

“Even in areas like the upmarket Atlantic Seaboard in Cape Town, volumes are under pressure and have fallen since last year by as much as 25 percent in some areas,” he said.

He said it’s about supply and demand with property prices acting as the pendulum. If owners don’t respond to a soft market by adjusting to market related prices, the number of sales will fall.

“Buyers are cautious especially in the current economy and are looking carefully for value and not only location,” he said.

Ballito on the KwaZulu-Natal north coast is said to have 60 percent of properties in the hands of holiday buyers compared to 90 percent two years ago, said Lloyd Rees of Tyson Properties.

“Holiday apartments were usually priced under R2 million with owners renting them out. “Buyers investing over that amount tended to keep their properties for their own use,” said Rees.

The area is attracting buyers from central Durban and Gauteng and the trend is that more permanent residents are flocking to this seaside location.

Rees said buyers are looking for secure and gated estates. Because of it’s a quality beach destination for Gauteng holiday makers, Rees said this makes Ballito an ideal place to buy a second home and perfect location for discerning buyers.

“I believe the Ballito property market growth will continue,” said Rees. – Denise Mhlanga

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