Life­style at­ti­tudes are the key to coastal sales

De­mand for Cape res­i­den­tial prop­erty is driv­ing top rank­ings in growth, writes Anna-marie Smith

Business Day - Home Front - - HOMEFRONT -

THIS year’s top rank­ings by prop­erty val­u­a­tor Light­stone shows that the Cape Prov­ince, in par­tic­u­lar the Western Cape, re­mains one of the prime prop­erty regions in the coun­try. While coastal hol­i­day prop­erty mar­kets re­main un­der pres­sure, they have his­tor­i­cally been viewed by buy­ers as a mar­ket pro­vid­ing in­come-gen­er­at­ing in­vest­ments.

The best in­fla­tion growth has been seen in Western Cape life­style de­vel­op­ments and small town prop­er­ties. This was re­flected in last month’s Light­stone list of SA’S Top 11 Prop­erty Cat­e­gories for last year, where the ob­jec­tive was to de­ter­mine best per­form­ers in terms of an­nual growth in av­er­age value for the dif­fer­ent prop­erty cat­e­gories.

The Top Prov­ince award went to the East­ern Cape as the lead­ing prov­ince last year, when the monthly House Price In­dices con­sis­tently ap­pre­ci­ated by 9% over the year, in­creas­ing from an av­er­age of R550 000 to R600 000.

John Loos, FNB House­hold and Prop­erty Sec­tor Strate­gist, says that this growth should be viewed in the spe­cific sit­u­a­tion of the East­ern Cape Prov­ince, as well as Kwazulu-natal, where both prov­inces took the hard­est knocks dur­ing the re­ces­sion.

Loos says these regions are show­ing a re­cov­ery af­ter lag­ging be­hind.

The work­ing es­tate of De Zalze Golf Es­tate in Stel­len­bosch was ranked first in the cat­e­gory of Top Lux­ury In­vest­ment Sub­urb that achieved an av­er­age seven-year yield of 242%. In the past three months this es­tate held the sec­ond high­est av­er­age es­tate price in Western Cape Mu­nic­i­pal rank­ings of R6,4m, with the high­est go­ing to La Ferme Chantelle in Franschhoek at R7,2m.

His­toric fig­ures in the Light­stone’s Es­tate re­ports re­flect De Zalze’s seven-year his­tory in av­er­age free­hold prop­erty val­ues, start­ing at R1m in 2004 and av­er­age sec­tional share prices start­ing out at R2,3m in 2010, show­ing growth to R2,4m last year.

Com­ment­ing on De Zalze’s prize-win­ning pop­u­lar­ity, Corne En­gel­brecht of Most Su­perb Prop­er­ties, says only 14 of the 440 houses are owned by for­eign­ers, since most Euro­pean trav­el­ling golfers rent accommodation in the es­tate’s golf vil­lage.

She says most prop­erty own­ers at De Zalze are per­ma­nent res­i­dents, mostly fam­i­lies who max­imise this cen­tral lo­ca­tion to ex­cel­lent schools, the univer­sity, Techno Park and lo­cal busi­ness ar­eas in Stel­len­bosch and Som­er­set West.

In 2010 his­toric growth at Western Cape lo­ca­tions was il­lus­trated in the Top 10 SA Sub­urb re­port by Light­stone, when the Western Cape dom­i­nated with six out of SA’S top 10 sub­urbs, two in Gaut­eng, and one in Kwazulu- Natal. At the time, Clifton was awarded the top rank­ing with av­er­age val­ues of R11,8m, Steen­berg Golf Es­tate at R11,4m, and Llan­dudno at R8,7m. In Gaut­eng, West­cliff was rated fourth with av­er­age house prices of R8,5m. In 10th place was Camps Bay on the At­lantic Seaboard at R6,6m.

By mid last year the Light­stone sub­urb re­ports showed in­creased av­er­age val­ues in all of these Cape sub­urbs. By then Clifton’s av­er­age free­hold val­ues stood at R13,6m, Steen­berg Golf Es­tate at R12,5m, Llan­dudno at R11,4m, and Camps Bay at R7,3m. In ad­di­tion, the 2011 Light­stone Top Es­tate Rat­ing went to the Western Cape when Sil­ver­hurst Es­tate in the Con­stan­tia Winelands showed av­er­age val­ues of R16,2m.

The run­ner-up with a 237% year-on-year an­nual growth in av­er­age prop­erty price growth in the 2012 Light­stone top rank­ings was the Top Mu­nic­i­pal­ity of Prince Al­bert in the Ka­roo, where val­ues es­ca­lated from R175 000 in 2010 to R590 000 for the same pe­riod last year. It re­ported: “While it is not ob­vi­ously ev­i­dent which par­tic­u­lar ar­eas or driv­ers con­trib­uted to this sub­stan­tial growth, this is typ­i­cally seen where res­i­den­tial de­vel­op­ments trans­fer to sec­ond buy­ers af­ter build­ing has taken place.”

Next in line was Vre­den­berg on the West Coast as Top In­land Town, show­ing a rise in av­er­age val­ues from R324 000 in 2010 to R560 000 last year, ef­fec­tively 73% year-on-year ap­pre­ci­a­tion.

Top Coastal Town went to Ken­ton-on-sea along the Sun­shine Coast in the East­ern Cape that saw av­er­age prop­erty val­ues in­crease by 50%, from 2010’s R1m to R1,5m last year.

The growth driv­ing this seg­ment of the mar­ket is seen to re­sult from de­mand for su­pe­rior qual­ity life­styles.

Up­coun­try buy­ers are pre­pared to com­mute for busi­ness while set­tling fam­i­lies in se­cure, lux­ury es­tates close to the coast.

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