Popular holiday home destinations
Buying a holiday home is a dream for many South Africans. Here’s where to look if you’re ready to invest.
Hermanus is an elite and perennially popular holiday destination that has gained global renown as the world’s foremost land-based whale-watching destination. Home prices here are still coming off their recessionary lows and thus represent some excellent buying opportunities, according to local Chas Everitt International franchisee Dean Meijer.
‘Like most coastal towns, Hermanus and the nearby areas of Onrus, Vermont and Sandbaai were all negatively affected by the downturn in discretionary spending following the 2009 recession, with consumers definitely thinking twice before buying or building a property just for holiday or weekend usage. This resulted in a stock oversupply and drop in prices that has not yet been fully overcome. Consequently, it is still possible for leisure buyers to acquire a stand in this sought-after region for as little as R300 000, or a sectional-title flat away from the beach for around R500 000. And prices for freehold homes in the outlying areas start at around R700 000, although they are of course much higher in the secure estates and in Hermanus itself can reach as much as R25 million for a seafront property on Millionaire’s Mile.’
Meanwhile the small Southern Cape coastal town of Stilbaai, which has only about 4 100 homes in total, is also experiencing a huge revival in interest among buyers seeking exclusivity and tranquility, according to the local Rawson Properties agents, Johan Cronje and Harry and Helene de Villiers. ‘At least 20% of Stilbaai’s homes are second homes, and the recession resulted in a very large number of these coming onto the market – so much so that we now have almost 500 homes listed to sell as well as about 1 000 stands. Not surprisingly, this huge increase in supply has brought prices down drastically, says Harry de Villiers, adding that interest has been so strong lately that all the homes available at prices below R1 million have been sold: ‘Those wanting to buy here now should be prepared to pay at least R1 million to R1,3 million.’ That said, prices are still heavily weighted in the buyer’s favour. On offer here at the moment, for example, is a five-bedroom, triple-storey home that originally came onto the market at R4,7 million and is now available at R3,2 million. Also available is a large house right on the main beach at R4,2 million (originally priced at R6,1 million).
Garden (Route) of Temptation
From Mossel Bay to Port Elizabeth, the towns attracting the most holiday-home buyers at the moment are Sedgefield, Knysna and Plettenberg Bay, according to the local agents. ‘The Knysna residential property market hit an all-time high in 2008/’09, but when the recession made itself felt in the years that followed, the market here, as in many coastal towns where a high proportion of homes are second or holiday residences, was very hard hit, says long-time local Rawson Properties franchisee Peter Southey. ‘In fact, since 2009 it has been possible to buy a home in Knysna at prices 30% to 40% lower than those of previous peaks.’
And now buyers are responding. ‘Business has definitely been better in the past year compared to the three preceding years,” says Seeff Knysna principal Billy Rautenbach. ‘Sellers really keen to sell now have moderated their asking prices and there has been holiday (and retirement) demand from Gauteng and Cape Town buyers as well as from SA expats. In the Brenton-on-Sea area we have also seen some business from British, German and Dutch “swallows” who come to spend their winters here.’
She says about 90% of all sales in Knysna over the past year have been in the under-R2 million category, but that the best value currently is actually to be found in the higher price brackets. ‘For example, we have a modern four-bedroom home with under-floor heating and great sea views available now for R3,8 million, and a spacious wooden cabin with three bedroom suites and a flatlet available for R2,8 million.’
In Plettenberg Bay, the current average price for a freehold property is around R2,5 million, and that for a sectional-title apartment is around R1,2 million, according to Hein Pretorius, owner of the local Sotheby’s International Realty franchise. ‘However, thanks to the collapse of the holiday home market in 2009 and lower demand since then, entry levels are still low by Plett standards, and that is now attracting many people who always wanted to buy a holiday home here but found it too pricey. Although stock is limited, entry-level houses are available from around R950 000, bachelor apartments from R400 000, and vacant stands from just R225 000.’
It is the little town of Sedgefield, though, that is proving to be the real star performer in the holiday-home stakes. ‘Although prices have not moved much, we have seen an increase of around 46% in the number of sales here this year compared with 2012,’ says Mario Ferreira, principal of the local Chas Everitt International franchise, who adds that a lot of these properties have gone to up-country and overseas buyers purchasing holiday and future retirement homes.
One reason for their enthusiasm, he says, is the fact that property prices here are still considerably lower than in higher profile Garden Route towns like George and Knysna. Another is that Sedgefield really is unspoilt, and likely to remain so since it has no manufacturing or other industry. Either way, demand here is such that it has actually prompted several new developments – a phenomenon almost unheard-of in coastal towns for the past four or five years – especially in areas around Myoli Beach, which scores of young holidaymakers now seem to have identified as the ‘in’ place on the Southern Cape coast.
‘I’ve been coming to Plett for my summer holidays since I was a child. We renovated the old beach pad five years ago as we still feel Plett offers some of the best-value coastal real estate in the country. There are still the blue flag beaches and the laid-back lifestyle, but the town centre is more fully fledged now than it used to be, with its own hospital and branches of most national retail chains,’ says Richard Millstone, a resident in Cape Town with a holiday home in Plettenberg Bay.