Castle in the sand
Low prices and low interest rates make this a great time to buy holiday homes, but beware the rose-tinted sunglasses.
For many South Africans, the dream of owning a holiday home by the sea – or at least a stand that they could one day build a cottage on – was shattered by the 2008/’09 recession, when they realised they could no longer afford to keep these properties and were forced to sell them off at much less, in most cases, than they had paid for them.
The property markets of many coastal towns went into free fall and the losses were heavy in emotional as well as financial terms. It is understandable, then, that buyers – and banks – are wary of getting into this sector again. Indeed, according to the latest statistics from First National Bank, pure holiday-home buying (as opposed to investment buying on the coast) currently accounts for only 2% of all house purchases.
However, the appeal of a private seaside getaway is not only universal but timeless, and a new generation of stressed city dwellers is starting to buy up coastal stands and houses at prices that often are still well below boom levels, while high net-worth individuals (HNWIs) who understand the growing rarity value of coastal land are taking the opportunity to add more luxury seafront properties to their portfolios. And, apart from one or two hot spots in KwaZulu-Natal and the Eastern Cape, certain stretches of the Western Cape coastline including the Garden Route appear to be the current focus of their attention.
West Side Story
On the West Coast, for example, Seeff’s agents report that after three years of very subdued activity, leisure buyers are now shopping for good real estate finds in the area and that this type of purchasing has risen by 20% to 30% in recent months. Sales in Vredenburg, the commercial centre of the area, totalled 136 in the past 12 months compared with 103 in the previous 12 months, and in Langebaan there has been a steady year-on-year improvement from 48 sales in 2009 to 78 sales, together worth R61 million, in the past year. And even in the small fishing village of Paternoster, sales have increased to 38 in the past year from 28 in the previous 12 months. And more than half these sales are estimated to have been to second-home buyers.
Pam Golding Property’s area manager for the West Coast, Stephanie Wynne Cole, says there have been continued enquiries and offers on properties in most areas since the start of the year, from Yzerfontein all the way north through the West Coast National Park, Langebaan, Saldanha Bay, Britannia Bay and Shelley Point to Velddrif/Port Owen. The buyer profile, she says, comprises mainly residents of Cape Town, Stellenbosch and Paarl, and demand is concentrated in several price ranges, including vacant plots from R200 000 to R400 000, townhouses and modest homes from R700 000 to R1,5 million, and larger family homes priced from R2 million to R4 million. ‘Yzerfontein, with its magnificent Blue Flag beach, enjoys particularly high demand from holiday and weekend buyers,’ she adds, ‘while Paternoster is increasingly popular for its range of excellent restaurants and real fishing-village ambience.’
Bay of Plenty
In False Bay, too, the revamped Strand beachfront is beginning to attract the attention of buyers looking for affordable seaside property in a prime location, say Seeff agents Alten Vermaak and Eldie Gerber. ‘Following a slump in sales along the beachfront post-boom, we have over the past two years seen a gradual recovery in demand, with around 20% of that coming from holiday-home buyers.
Annual sales are now around 100 properties, worth a total of R135 million, and stock levels are declining too. Three years ago, we had around 300 properties on our books, and now there are only about 135 units.’
With the Hottentots Holland Mountains as a backdrop and a five-kilometre-long coastline with a Blue Flag beach, the area offers an idyllic setting and a laid-back coastal lifestyle, says Seeff’s principal for the area, Kobus Lubbe. The upgrade of the beachfront over the past few years has turned it into a trendy strip with a popular promenade, restaurants and family-friendly amenities that include mini golf, an Olympic-size swimming pool, tidal pool and water slide.
Ocean meets Mountain
The Strand also offers a great selection of relatively affordable real estate, from modern apartments with panoramic views to seaside homes in the Greenways Golf Estate, but the nearby village of Gordon’s Bay is even more reasonable, says Paul Matthews of the local RealNet franchise. ‘Property prices compare very favourably to nearby towns such as Strand and Somerset West, and comparable properties in Gordon’s Bay can represent a saving of up to 20%,’ he notes. ‘And the village’s setting is another strong draw card. It nestles between the ocean and a north-facing mountain slope with off-shore prevailing winds that ensure a pleasant climate and spectacular views.’
Text: Meg Wilson
Photographs: Adriaan Louw, supplied