Southern Cape is luring those who can’t afford to buy in Cape Town

SOUTHERN Cape areas could lure aspirant semigrants away from Cape Town as its market is still performing strongly, but its property prices are not as high.

Figures from the last three months of 2017 show that despite house- price growth rates in this region – including Mossel Bay, George, Knysna, Plettenberg Bay, and Oudtshoorn – almost maintaining decade-high levels, it is not as unaffordable as places closer to and within the City of Cape Town Metro.

The FNB Southern Cape House Price Index revealed growth was still at a “relatively strong” 10.3% in the fourth quarter of 2017, but the bank’s property economist John Loos says this was mar- ginally slower that the 10.4% rate of the previous quarter – the highest year-on-year price growth rate since early-2007.

Even so, it is “still impressive”.

“Looking back over the past five years, from the end of 2012, the Southern Cape House Price Index has under-performed the overall Western Cape House Price Index, while the entire Western Cape market has inflated cumulatively by a stronger 74.6% over the same period.”

Price growth in the City of Cape Town has been 78.8% over the past five years.

But while the Southern Cape has “under-performed” relative to the Cape Town area, Loos says it has outperformed the national house price growth average, and shown better growth than holiday towns as a group nationally. This is due to a significant portion of retiree semigrants – and small groups of economically productive semigrants – moving to this region.

He believes as aspirant semigrants search for more affordable regions with the quality of life they desire, the Southern Cape could soon become more desirable.

“While the region has limits in economic opportunities, it offers a very high quality of life, is more affordable than Cape Town, and does not possess the growing congestion of Cape Town and surrounds.”

Pam Golding Properties chief executive Andrew Golding said in his end-of-year wrap: “Semigration to the Garden Route is a result of good property offerings in price, together with lifestyle living. This has accelerated interest in the region from Knysna and Plettenberg Bay to George and Mossel Bay.”

After a record 2016, the Sotheby’s International realty office in Plettenberg Bay experienced its second- best year to date in 2017. And 2018 is already off to a “promising start”, says manager principal Steve Neufeld.

According to Lightstone, of the 738 sales in Plett during the 12 months ending February 2017, a total of 189 were first-time home registrations (excluding plots) at the lower end of the market. In Hermanus, there were 36 new registrations of which 17 were below R1.5 million and 18 were in the R1.5m to R3m bracket, with just one priced above R3m. He says ongoing demand for permanent homes in these areas is still being fuelled by semigration.

Sheena Mare, area specialist in Knysna and Sedgefield for Lew Geffen Sotheby’s International Realty, believes the Garden Route has become a destination of choice, especially for retirees and people downsizing.

“We are also seeing more Capetonians. They can buy a lot more house than in Cape Town and many are escaping growing traffic congestion.”

Tony Ketcher, regional manager for the Seeff property group’s operations across the Garden Route and Eastern Cape, says: “The area is now seen as a popular alternative to Cape Town. Prices on the Garden Route are well below what you would pay across Cape Town.”

With an international airport, the busy commercial hubs of George and Mossel Bay, and excellent schools, Ketcher says it makes sense for buyers to move here from other provinces.

“The areas are seen as relatively safe. There is less traffic and the climate is more temperate.”