GREAT RUSH TO THE CAPE
The pandemic has breathed new life into the ‘semigration’ trend, as sales soar in the Western Cape. And former sweet spots Clifton and Claremont are being replaced by Mossel Bay and Agulhas
t seems the Western Cape is firmly back in vogue among upcountry homebuyers in search of a more relaxed coastal lifestyle.
Anecdotal evidence of the trend, seemingly spurred on by the widespread adoption of remote working and near 50-year-low interest rates, is borne out by new figures from BetterBond.
The mortgage originator recorded a 49% increase in mortgage applications, year on year, from people looking to buy property in the Western Cape in the first three months of 2021. That’s way ahead of the average 24% increase in the number of applications received for the other provinces combined over that same time.
In March alone, the intake of new mortgage applications in the Western Cape soared 64% year on year.
These figures provide a fair representation of SA’s home loan market, since BetterBond claims to have a 33% share of that market.
BetterBond CEO Carl Coetzee says there’s no doubt that the significant growth in demand in the Western Cape has, in part, been driven by a resurgence in semigration from other provinces, which had stalled in recent years. Between 2018 and 2020, growth was muted, due to the province’s crippling drought, punitive water restrictions and political infighting in local DA-run councils.
During that time, Coetzee says the premium that homebuyers had to pay in the Western Cape — and in Cape Town in particular — compared to other provinces also made semigration financially less viable.
IWhat it means Smaller Western Cape towns are seeing a surge in property sales
But lower house price growth in the Western Cape over the past two years, coupled with low interest rates and pandemicinduced changes to the way people work, has resulted in the province re-emerging as a prime relocation destination.
Lightstone’s residential property index reveals that house price growth in the Western Cape had slowed markedly over the past three years — from between 10% and 12% in 2014-2017, to 3.6% by the end of 2020. That’s the lowest house price growth recorded in any of the nine provinces and less than half the 7.7% increase seen in the North West,
SA’s fastest-growing province in 2020.
Now, however, Coetzee says BetterBond’s data shows a shift away from city living to smaller seaside enclaves, which offer better value for money than Cape Town.
“As people move away from the office to
Mortgage applications Q1 2021 (% growth y/y) work remotely, many of the coastal towns, once considered stops en route to a holiday destination, are now being seen as prime residential nodes offering value for money and quality of life,” he says.
Other property experts report a similar trend in semigration to smaller Western Cape coastal areas, a result of the “zoom town” phenomenon.
Estate agency RE/MAX has reported that sales have reached a 15-year high in popular weekend bolthole Langebaan and surrounding areas. And the R10m ceiling that previously existed in Langebaan was recently surpassed, says Domonick Lodewick, owner of the local RE/MAX agency.
Lodewick says Langebaan ticks all the boxes for those looking to escape from a busy city life and urban lockdown. “The majority of buyers in the area are looking for homes that facilitate a lock-up-and-go work-from-home lifestyle,” he says.
Samuel Seeff, chair of the Seeff Property Group, believes the longer the pandemic lingers and the longer SA’s vaccination rollout takes, the more buyers will gravitate to less-crowded areas that offer a relaxed and safe outdoor lifestyle.
Seeff says the areas that have benefited most are those within easy reach of the city or airport. Apart from Langebaan, where his group has also seen a sales boom in recent months, Seeff singles out Hermanus, Struisbaai and Agulhas as newly desirable relocation destinations. Agulhas is famous for its whitewashed fishermen’s cottages and for being the southernmost point of Africa.
Interestingly, buyer demographics are also shifting. In particular, there has been a marked increase in younger families heading to coastal “zoom towns”. Previously it had been older buyers and retirees who had migrated away from the cities.
“In Hermanus, for example, almost 25% of all permanent residents are now under 35. In Langebaan, it’s closer to 33%,” says Seeff.
Another unusual feature in recent months has been the fact that there has been slightly higher price growth on the coast compared to inland areas — something which Seeff describes as “rather uncharacteristic”.
One of the more surprising contenders as a Western Cape semigration hotspot is Mossel Bay, on the Garden Route roughly halfway between Cape Town and Port Elizabeth along the N2.
Paul Stevens, CEO of Just Property, says a huge number of Gauteng families have relocated to the town permanently since January. He reckons Mossel Bay’s reputation as one of the best-run towns in SA is a key attraction. Last month, independent researchers at Ratings Afrika named Mossel Bay as SA’s most “financially sustainable” municipality.
The allure has been further boosted by
Total’s gas exploration activities off the Mossel
Bay coast. The petroleum giant believes the area potentially holds about 1-billion barrels of oilequivalent gas, which could add R1-trillion to the SA economy over the next 20 years.
Pam Golding Properties (PGP) reports a similar surge in Mossel Bay in recent months. PGP area principal Stephen Murray says Mossel Bay is fast becoming a thriving primary residential destination, with new estates mushrooming.
As a result, money is flowing into the town at a rapid rate. A new day hospital recently opened, and more schools are due to open. Shopping centres are being upgraded, as are many of the town’s older buildings.
Murray says other drawcards are the easy access to George Airport — about half an hour’s drive away — and plenty of leisure amenities, including golf courses. He says the town, which has a population of around 100,000, is also known for its sense of community.
But perhaps the biggest factor in the sudden interest in Mossel
Bay is that buyers get significantly more bang for their buck than they get in nearby Plettenberg Bay and Knysna.
Murray says while mansions in swanky golf estate Pinnacle Point can command prices up to R20m, there are still options for middle-income buyers. For instance, three-bedroom properties in popular seafront areas such as the Point and Diaz Beach go for between R1.8m and R3m. And prices of undeveloped stands within walking distance of the beach sell for about R500,000.
The eco-estate Springerbaai offers newly built off-the-grid properties with direct beach access from R3.75m. If you’re planning to ditch the big city and work remotely, that isn’t the worst deal you could hope to find.
The majority of buyers in the area are looking for homes that facilitate a lockup-and-go workfrom-home lifestyle
Domonick Lodewick