Demand for seaside living drives house price growth
Buoyed by the ongoing demand for a coastal lifestyle, the housing markets of towns in the Eastern and Western Cape have become drivers of property price growth over the past 12 months.
A perennial top performer, the Western Cape has seen a 10% increase in property prices from August 2022 to August this year, BetterBond head of sales Bradd Bendall said. The province recorded the largest average home price increase over the period — 35% higher than the national average.
While this performance is not unexpected, it is noteworthy that the neighbouring Eastern Cape is showing similar house price growth.
According to the September 2023 BetterBond Property Brief, house prices in the Eastern Cape have increased by just over 8%, recording the second-highest increase year-on-year.
“The rise of the Eastern Cape, notwithstanding its natural beauty, unspoilt coastline and enviable lifestyle, seems almost counterintuitive,” Bendall said.
Lightstone has reported that the province has slow population growth and limited economic opportunities.
However, the Eastern Cape’s property boom is being driven by its smaller seaside towns offering great lifestyles for families relocating from Gauteng and other provinces.
Lightstone reported in July that property prices in the Eastern Cape were highest in its smaller towns. Homes are selling for an average of R2.4m
in Cape St Francis and R2.1m in St Francis Bay.
“St Francis has seen a massive influx of new families moving into the area as semigration continues,”Chas Everitt CEO Barry Davies said.
In Port Alfred, the average sales price is R1.5m, Bendall said. By comparison, average house prices in Gqeberha are lower at R840,000.
While the Eastern Cape ’ s remarkable performance in terms of house price growth and sales volumes comes off a relatively low base, Davies said markets in the Western Cape attract buyers in the higher price bands. Cape Town is home to some of the country’s most upmarket residential areas, including Clifton and Bantry Bay on the Atlantic Seaboard.
The province also attracts high-net-worth individuals who are able to spend many millions on property.
These buyers also look to the picturesque Boland towns of Franschhoek, Paarl and Stellenbosch in the Cape
Winelands area. Hermanus is the fastest-growing area for high-net-worth individuals, according to the Africa Wealth Report for 2023 published by Henley & Partners and New World Wealth.
A renovated home at the Point, in Mossel
Bay, recently sold for R39m, the highest price ever in the area.
No longer viewed only as holiday destinations, these popular coastal towns offer enviable lifestyles and competitive property prices, Bendall said. Although demand is driving house price growth, with Lightstone reporting a 7% price inflation of coastal properties compared with the 2.4% growth of prices of inland properties, they are still accessible to many buyers. “With so much to offer, from natural beauty and amenities to reliable infrastructure and efficient service delivery, it’s understandable that the number of people relocating to the coast has increased from 31% in 2018 to 46% currently.”