Western Cape still hot for holiday homes
But sales elsewhere across South Africa gone cold
ACROSS the country, markets for holiday homes are feeling the pressure of slow economic growth and political instability as people aren’t spending amid concern for their financial futures. There are areas in the Western Cape that remain magnets for holiday home buyers, but analysts and estate agents report notable declines in these purchases.
The recent FNB Holiday Town House Price Index has seen its growth “starting to lose momentum from a relative revised high of 6.4% year-on-year in the third quarter of 2016 to 4.8% by the second quarter of 2017,” says FNB’s household and property sector strategist John Loos.
Even though this growth remains a “reasonable rate” in a weak economy, he says this does translate into a shift into negative real growth considering it is now below consumer price inflation.
“It is realistic to expect slower holiday town markets – possibly under- performing the more primary residence-driven major metro regions, given that a tighter economy will probably drive the emergence of more conservative households. In such an environment, non-essential home buying such as holiday homes becomes less of a priority.”
Across Cape Town in general, Steve Thomas, franchise manager for Lew Geffen Sotheby’s International Realty in False Bay and Noordhoek, says properties are still being purchased as holiday homes, but compared to the first quarter of the year, the volumes of these types of sales have “definitely dropped”.
“An R8 million sale in Kalk Bay, concluded in the last week of March with a British buyer looking for a holiday home, fell through in April after the cabinet reshuffle. The buyer expressed concern regarding the future value of his investment.”
Where holiday home buying is taking pace, Thomas says the majority of purchases are along the coast of Cape Town, with the smallest proportion of buyers Cape Town locals, who tend to buy in the smaller coastal areas like Simon’s Town, Fish Hoek and Kommetjie.
Most come from other parts of South Africa, including Gauteng, KwaZulu-Natal and Mpumalanga.
These buyers opt for properties in any of the holiday destinations, from affordable sectional title units in Muizenberg to top end homes on the Atlantic seaboard.
“The balance of holiday home buyers is overseas citizens. They tend to focus on the top-end of the market, probably because of affordability, and buy mostly in Hout Bay, Big Bay on the West Coast, the Atlantic seaboard and the Waterfront,” Thomas says.
Despite the downturn in holiday home sales, Brendan Miller, Lew Geffen Sotheby’s International Realty Atlantic seaboard and City Bowl chief executive, says the Atlantic seaboard hotspots for foreign buyers are Clifton, Bantry Bay and Camps Bay. Overall, Johannesburg buyers remain “number one”.
Holiday home buyers are still motivated by the “spectacular” capital growth offered by the Atlantic seaboard, with most properties having doubled in value from 2013, says Basil Moraitis, Pam Golding Properties area manager for the Atlantic seaboard. He says numbers have generally fallen this year.
“Owning a holiday home in this sought-after stretch allows buyers to enjoy the lifestyle on the Atlantic seaboard, as opposed to investing in shares which don’t offer the added lifestyle benefits.”
Hotspots for foreign Camps Bay
Moraitis says many holiday home owners secure apartments as holiday homes and for their children to use while at university. Others, he says, plan to move to the Atlantic seaboard in the future.
So popular is the Atlantic seaboard that Andreas and Gemma Soukop, from Soukop Camps Bay, have not noticed a decrease in holiday home buying.
“There is still a strong buyer presence from Europe and, more recently, an increase in buyers from Asia. In the middle bracket – Sea Point and Green Point – there has been no slow-down on interest in properties that investors can utilise for Airbnb. Inquiries of this nature make up about 30% of our inquiries,” says Andreas Soukop.
When it comes to personal holiday use, Gemma Soukop says most homes for this purpose are bought in Camps Bay, Cifton, Bantry Bay and Fresnaye. She says there has been a “significant increase” over the past year in such buyers from Johannesburg.
“Buyers wanting to use the homes as a holiday income generators are more prevalent in Sea Point and Green Point. About 50% are planned to be used for Airbnb, with larger homes in Camps Bay, Clifton, Bantry Bay and Fresnaye used as a mix or just personal holiday use.”
Hermanus is also still seeing strong demand for traditional holiday homes, says Nicola Lloyd, Pam Golding Properties agent for Hermanus, Onrus and Elgin.
This demand is especially seen from Gauteng buyers for shortterm holiday use, and permanent residents for longer-term use.
“Demand for vacant land has also increased. Gauteng buyers are buying and holding plots for the future.
“Demand for permanent homes has increased substantially and this remains the primary reason for buying in the villages.”
Pam Golding Properties also reports that Kalk Bay, where property prices have quadrupled in the past decade, has become particularly popular with “swallows” who come to Cape Town for four to six months of the year.
And Blouberg’s kite- surfing opportunities make it a popular spot.
This four-bedroom Mouille Point apartment, with great sea views, is ideal as a holiday apartment.