Weekend Argus (Saturday Edition)
Demand for seaside living driving up prices
IT MIGHT come as a surprise considering the financial stress many South Africans are under, but the purchase of holiday homes in coastal areas is increasing. In fact, the market is so active that some areas have run out of stock.
Living near the sea is a dream for many people, says Alexa Horne, the managing director of Dogon Group Properties. Added to the beauty, the tranquillity and the views, there is also an entire lifestyle that comes with coastal living.
“Take it up a level, and you get the homes that enjoy seafront locations, perched as close as possible to the ocean, with nothing to interrupt the sweeping views and easy access to sea and sand. These homes are in short supply compared to those that cluster behind them in coastal suburbs.
“For many, seafront living represents the dream of owning the best of the best – a property that stands out from the rest and sets one apart through its prestige and the sense of arrival that comes with being able to live in a home on the water’s edge.”
In Cape Town, the trend is no different, and coastal homes with seafront addresses in areas such as the Atlantic Seaboard, Simon’s Town and the Western Seaboard are commanding impressive prices. According to recent stats, coastal house prices continue to accelerate, rising by almost double that of non-coastal property prices.
However, she says, this is not deterring buyers who continue to snap up the primely located gems – price irrespective. Seafront homes in Cape Town are in high demand from South African buyers who have semigrated from other provinces, as well as from foreign buyers, who are flocking to the city to take advantage of the spectacular climate and value for money offered to those brandishing foreign currency.
In the past year alone, Dogon has sold many seafront properties to local and foreign buyers from countries such as Germany, the UK, US and the Netherlands
In Plettenberg Bay, Hein Pretorius, the owner broker of Lew Geffen Sotheby’s International Realty in the area, says the market is “similar to what it was pre-Covid”. The main exception in the marketplace is that a lot more people are buying the homes for their permanent residence.
“More people are buying holiday homes than selling. Many people that had second homes which they used for holidays have now moved into them permanently, and some people are buying second homes which they will use for holidays for now but with plans to move into them at some point.”
Many who are selling are doing so to either upgrade or downscale.
He says most buyers are from Plett and Gauteng although, this year, local buyers are slightly ahead of their up-country counterparts.
“Gauteng buyers tend to be families moving here and some are still buying holiday homes. The majority of Plett buyers are either up- or downgrading or buying for investment. They are buying across the board, but gated estates are preferred.”
James Carney, the property practitioner for Tyson Properties Atlantic Seaboard, says Cape Town has always been a popular destination for travellers from all over the world as the city offers experiences that rival even some of the most sought-after European destinations, at a fraction of the cost.
“The quality of our restaurants, wine farms and beaches are voted as some of the best in the entire world. This, mixed with the high concentration of modern and contemporary homes along the Atlantic Seaboard, makes for a very attractive destination.”
He says the holiday home market has returned to pre-Covid levels, but says there appears to be more wealthy
South Africans (from up-country) and continental travellers (from other countries in Africa) in general who are taking up a lot of the mid- to high-range villas.
“On the Atlantic Seaboard, areas such as Clifton, Bantry Bay, Llandudno, and Camps Bay are all popular for purchasers seeking holiday homes.
“Wealthy families from Johannesburg and Durban make up the majority of purchasers buying up properties in these areas, as well as clients from Europe – comprising of mostly German, British, and Swedish families.”
While there are some who are selling their second properties, Ross Levin, the licensee for Seeff Atlantic Seaboard and City Bowl, says there has been “a significant uptick” in the buying of second/ holiday homes this year.
“Buying has been buoyant and there is a shortage of stock for the first time in years. Buyers are made up of Europeans – who have always liked to summer in Cape Town, but we have seen the war increase the purchasing from this region with them wanting a foothold on another continent. Also, American purchasers continue to increase, along with up-country buyers.”
On the Cape West Coast, Michelle Livingstone-Louw, an agent with Seeff Yzerfontein, says holiday homes are in demand but there is a shortage of stock, often due to overpricing of older homes and buyers are not eager to pay higher prices. Sellers are mostly older people looking to move closer to medical facilities.
Paul Stevens, the chief executive of Just Property, says some of its offices, like Zululand, report an increase in the listing of second homes or rental properties, quoting affordability, rising interest rates, and cost of living as the primary reasons.
“The properties listed at the correct market price are selling quickly. Our offices in Mossel Bay, Stilbaai, Struisbaai and other coastal towns report stock shortages and frustrated clients who want to buy but don’t have many options.”
The current holiday market is extremely buoyant and showing much better results than previous years preCovid, agrees Nick Pearson, the chief executive of Tyson Properties.
“Many South Africans have chosen to semigrate and set up permanent residence in what was traditionally known as holiday towns. A major factor being that people have learnt to work remotely and the time spent trapped at home during Covid made them realise that they want to be in a different space. People are now more focused on having a balanced life and want to enjoy family time – and the outdoors.”
For those who are selling their holiday homes, the reason is mainly that they have seen the upswing in value of their properties and want to capitalise on this current opportunity.
In KwaZulu-Natal, he says, the Midlands continues to be a popular choice for people who want to escape the city. Plus, it is a relatively short drive from
Johannesburg and Durban.
The holiday home market compared to pre-Covid has been “very good”, says Sabrina Errico, Lew Geffen Sotheby’s International Realty broker principal in Ballito and uMhlanga.
In addition, she says there has not been an increase in people selling their homes. Those who are selling are doing so because they either don’t use them enough or they are cashing in to emigrate.
“In fact, we are still experiencing a shortage of stock,” she says.
The Ballito and Blythdale areas have few holiday homes on the market, and those that are up for sale are due to emigration, people moving to the Cape, or simply downsizing.
“We still have mostly Gauteng buyers, with many relocating permanently – and definitely more so after Covid. We are seeing more relocations than investment buys.”
On the province’s South Coast, Joleen Giraudeau, the manager for Seeff South Coast, says there had been a spike in sales of holiday homes during the mid-2020 to end-2021 period as people looked to spend more time away from the cities.
Since then, holiday home sales have slowed due to the interest rate hikes and weaker economic outlook.