Lifestyle attitudes are the key to coastal sales
Demand for Cape residential property is driving top rankings in growth, writes Anna-marie Smith
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.