The Garden Route property market still largely favours sellers with a shortage of stock evident in some areas while Seeff’s branches are still reporting record sales months. At the same time, it remains characterised by outstanding value, offering apartments below R500,000 and houses below R1,5 million.
Overall, the market has improved by almost 60% since the 2007/8 decline and for the last year, topped R6bn with over 4400 transactions at an average transaction price of R1.3m for the main towns of George, Mossel Bay, Knysna and Plettenberg Bay.
FNB recently reported in its Southern Cape House Price Index that the market remained near its decade high growth rates by end 2017 and it expects more of the same this year, boosted by semigration as an alternative to the Cape.
Seeff’s principals confirm that while second home buying has slowed, the residential market remains active and there is a steady stream of buyers moving here from upcountry provinces. A better lifestyle with less traffic, security for families to raise children, excellent schools and healthcare and more affordable property make the Garden Route a preferred alternative to the Cape, says Pieter Jordaan of Seeff George.
The abundance sunshine and healthy climate is attractive for retires while first time buyers can find real value here, he says. Access to the area is easy via road or to the George Airport. Plettenberg Bay (Plett) also has its own airport.
Jordaan says that George, the main commercial centre, is still booming. Sellers are often getting their full asking price and property values have appreciated by 15-30% below R1m and by 5-10% above R3m over the last three years.
Affordability is a big driver and you can still find a two-bed apartment for R649,000 and a full title property for R900,000 on average in areas such as George Central and South. Townhouses range from R1.25m and luxury lifestyle and golf estate homes from R2m-R6m to R8m close to the sea in the Oubaai Golf Estate.
Areas such as George East, Groenkloof and Welgelegen also offer properties in the R1.45m-R2m range focused on the needs of older persons. Swallows and holiday buyers tend to focus on Kingswood, Oubaai Golf Estate, The Brink & Breakwater Bay and Glenwood, generally in the R2m-R6m price range.
Rental property is still in short supply and prices have doubled over the last three years. In estates, tenants are now willing to pay as much as R20,000-R30,000/month for a rental house. This means there are good prospects for investors in the buy-to-let and sectional title market. Older homes ready for upgrading also offer good prospects for investment buyers.
Kaaiman Schutte, principal for Seeff’s Mossel Bay area says his market has also not deteriorated and his office has enjoyed record months since December with overall sales growth of 600% over the last four years. Buyers are often surprised to find that sellers won’t accept low cash offers.
A well-managed local government, great infrastructure, quality education, Blue Flag beaches, growing eco awareness, a flourishing tourism industry, low crime figures and a balanced mix of locals and residents from the rest of SA are all reasons for the positivity, he says.
The town offers some of the most affordable coastal property starting at around R850,000 for a two-bed apartment, R1.2m for a townhouse and R1.5m for a three-bed house. Luxury houses range from R2.5m-R5.5m.
Fairly flat 5-6% year-on-year price growth means there is still good value, especially in areas such as the Brak Meander, Hartenbos and Dana Bay. Overall, Mossel Bay caters to all needs, from holiday lock-up-and-go to buy-to-let, vacant stands, gated communities and freehold residential properties. The rental market is also healthy with excellent demand, driven by an affordable average rental rate that stands at around R7,000/month.
There is some pick-up in investment buying with developers beginning to show interest again. Stock shortages are generally evident below R2m with a serious stock issue around R1.1m.
While Knysna and Plettenberg Bay are feeling the effect of the economic downturn with a dip in the second home market, it continues to be business as usual for their residential markets according to Seeff’s principals.
Gail Giannonne from Knysna says there is something to suit every budget and buyer in the area. The highest prices tend to be paid in the waterfront developments with Leisure Isle for example recording a sale of R24.325m over the last year and in Pezula, two top end sales at R22m and R23m each.
Plettenberg’s Kevin Engelsman says that price increases have been moderate at 37% from five years ago which is a good incentive for buyers. High value property above R20m remains in demand, especially in areas such as Beachy Head Drive.