28 Oct 2011
The South African holiday property market is said to be suffering currently as property buyers are choosing to purchase primary residences instead.
According to estate agents surveyed in the FNB Property Barometer Holiday Towns versus Metros Q2 2011 report, demand for holiday property homes has declined.
The report suggests that holiday-driven property regions in South Africa are more cyclical than primary residential-driven major metro regions, reaching higher peaks in the booms and lower troughs in the tough economic times.
FNB Home Loans property strategist John Loos says after a recovery of around 1 percent in mid 2010, the estimated holiday property buying expressed as a percentage of total residential buying dropped from 3 percent in Q2 2011 to 2 percent in the third quarter.
Loos says the percentages remain below the 5 percent level recorded at the beginning of 2007.
He explains that the continued focus primarily on primary residential buying means that major metro housing markets appear to outperform those towns more strongly driven by holiday property demand.
The FNB Holiday Towns House Price Index remains in deflation territory of -4.9 percent year-on-year in Q3 2011 while the country’s six primary residential demand-driven metros showed house price growth of +3.8 percent.
Both indices are estimated using Deeds Data transactions by individuals, he adds.
Estate agents operating in some holiday towns in South Africa report an increase in buyers who seek a better quality of life away from bustling cities.
Keith Brown, Jawitz Properties principal franchisee says the property market in Ballito is looking up adding that although there have been fewer property sales than pre-2008, home prices have not come down as dramatically as in other areas in KwaZulu-Natal.
Brown says the market has been reasonably stable for the past year and is expected to remain steady in 2012.
“Supply and demand always plays a role in pricing as well as external factors such as the bank lending criteria and the economy.”
He says the greatest value is still in the suburbs where homeowners pay less per square metre and demand for older homes that need renovation has increased with stock shortages.
The average price for a three bedroom family home is R1.9 million while a renovated home of equal size starts from R3 million.
Properties in gated estates are priced from R3 million and two bedroom sectional title units on the beachfront cost anything from R1.5 million depending on location and age of building.
He says the lower end of the market up to R1.5 million is the most active segment fuelled mainly by first-time buyers who qualify for home loans. The middle income segment buyers in the price ranges of between R1.5 million to R3.5 million are faced with affordability issues making it difficult to access finance and sales are quite slow in the upper end of the market.
“Deals when they do occur, are usually generated by cash buyers or bridging finance,” he says.
The coastal town of Sedgefield in the Western Cape not only remains a village of choice for retirees but has recently been attracting new buyers including sports enthusiasts, reports Pam Golding Properties (PGP).
Walter Bakker, PGP Sedgefield marketing manager says this town where the pace is slow (thanks to its newfound Cittaslow status as a result of the annual Slow Festival every July) has seen increased global exposure attracting interest from buyers wanting to own homes in the area.
Bakker says homes priced from the early millions are being snapped up by investors and buyers who waited to capitalise on opportunities to finally purchase their longed-for seaside home.
He says two bedroom homes with a full one bedroom guest suite with own kitchen are priced at R895 000 and R999 000 buys one a family home.
Building activity in Sedgefield has resumed with new homes being developed in suburbs such as Cola Beach in the Cola Conservancy.
Bakker adds that 60 to 70 percent of permanent residents in Sedgefield are homeowners making it a desirable place to live.
The Cape coastline from Gordon’s Bay towards the southern Cape is renowned as one of the most beautiful scenic drives in the world and whale-watching opportunities.
PGP managing director for the Boland and Overberg region, Annien Borg says the Whale Coast, spanning the towns from Pringle Bay in the west to Gansbaai in the east offers a wide range of property options at attractive prices.
Borg says there is something to suit every need and price range, from vacant land to apartments, compact holiday homes and luxury seaside mansions.
“The individual towns vary in size, amenities and property offering but what they all have in common is a magnificent seaside setting and a slower pace of life, ideal for holidaymakers, retirees or those who simply want to opt out of the hustle and bustle of big city living.”
PGP says Betty’s Bay is renowned for its magnificent botanical gardens and extensive network of beaches and inland waterways.
A vacant 600 square metre plot in Pringle Bay costs under R400 000, a small holiday cottage under R850 000 and larger family homes for between R985 000 and R1.4 million.
In Betty’s Bay, modern family homes with four bedrooms or more located slightly back from the seafront are available for between R950 000 and R1.8 million.
Prices increase with proximity to the sea and on the coastline itself there are a number of modern luxury homes selling for between R3.2 million and R7.5 million.
Kleinmond is the largest town in the area offering more extensive amenities including two primary schools, four shopping complexes, gyms, doctors and pharmacies.
Prices start from R250 000 for a 600 square metre plot and R550 000 for a two-bedroom apartment. Smaller homes are priced from R890 000 to R1.2 million while larger family homes cost between R1.4 million to R6.5 million.
Hermanus is now a thriving, bustling town with excellent beaches, superb sailing on its lagoon and a variety of other outdoor activities to enjoy.
Vacant land in Hermanus can be obtained from around R1 million and bachelor apartments for R450 000.
Larger apartments with multiple bedrooms are priced from R800 000, the entry level for homes is around R1.5 million and larger family homes located closer to the beach in prime suburbs can fetch anything from R6 million to R10 million.
The growth in this niche tourism market has led to the area’s expansion in recent years offering a number of new developments with land costing as little as R400 000 for 600 square metres, says PGP.
A starter home on a sizeable plot costs less than R800 000, larger three- or four-bedroom houses are priced at R1 million and luxury beach houses are priced from R7 million to over R10 million, according to PGP. – Denise Mhlanga
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