One town in the Western Cape where average house prices doubled to R4.9 million in 5 years
Plettenberg Bay has seen its property prices doubled in five years, with the average pice now at R4.9 million.
Plettenberg Bay is a seaside town on the Garden Route in South Africa’s Western Cape Province.
A property experts told BusinessTech that much of this surge has been fuelled by semigration, particularly during and after the Covid-19 pandemic.
“The growth has significantly outpaced the national average,” said Seeff’s licensee for the area, Mrs Alet Olletmans.
“Buyers flocked here to snap up second homes, paying ever higher prices. The warm climate, warm ocean, stress-free environment, and easy access from just about anywhere in the country make the town popular with luxury buyers for retirement or second homes.”
During peak holiday periods, Mrs Ollemans noted that it is crowded, with almost no accommodation available. Many property owners with second homes there spend extended periods in the area.
The market has achieved some of the highest prices in South Africa, “second only to the Atlantic Seaboard, with a number of sales over R20 million and as much as R55 million and R80 million.”
One of the most expensive addresses is Beachy Head Drive in the suburb of Seaside Longships. “Homes there typically sell for over R20 million,” said Mrs Ollemans.
Houses are typically priced from R3.5 million to R8.5 million, high-end homes range from R5 million to R15 million, and the top price achieved is R78 million.
Sectional titles range from around R1.8 million to R3.8 million, with new units upwards of R6 million. However, Hayley Ivins-Downes, managing executive of Real Estate at Lightstone Property, noted that this price growth has come at a cost.
“The strength of the market above R3 million has consequences for those whose earnings restrict home ownership to affordable levels,” she said.
Lightstone’s data shows that approximately 40% of these properties were purchased within the last five years as the town’s popularity surged. A significant portion, 420 homes, are valued at over R10 million.
Other areas seeing notable property price growth
However, Ivins-Downes warned that this boom has a serious downside, which is a lack of affordable housing.
“The strength of the market above R3 million has consequences for those whose earnings restrict home ownership to affordable levels,” she said.
Many of the people who keep the town running, those employed in hospitality, retail, municipal services, and other local sectors, cannot afford to live in the place where they work.
There is a dire shortage of formal housing for those earning below R26,000 per month, and no easy solutions are in sight.
While Plettenberg Bay’s surge has been exceptional, other parts of the country have also seen sharp increases.
On Cape Town’s Atlantic Seaboard, Ross Levin, licensee for Seeff Atlantic Seaboard and City Bowl, noted that Camps Bay has recorded five-year price growth of 38%, with the average selling price at R13.5 million.
“Reasons for growth include the high-demand location, spectacular views, and limited availability, coupled with demand from local, semigration, and especially international buyers, mostly German, UK, and other European,” said Levin.
In Gauteng, Dave Ingle, licensee for Seeff Edenvale and Bedfordview, said Modderfontein has seen five-year price growth of 28%, with the average price at R4.1 million.
He attributed this to the convenient location, access to top-class amenities and great schools, and secure, family-friendly estates.
Gregg Wilson, licensee for Seeff Upper Highway, added that Cotswold Downs Golf & Country Estate in KwaZulu-Natal’s Hillcrest has experienced five-year price growth of 31%, with the average price at R5.25 million.
“The growth includes pandemic-induced demand for secure, lifestyle-oriented estates that offer space and amenities, and just the overall migration of people to security estates.”
Gerhard van der Linde, MD for Seeff Pretoria East, noted that Pretoria East’s Mooikloof area has also benefited, with five-year price growth of 22% and an average price of R7.1 million.
The growth is driven by the migration to security estates and moving outwards from the city to prestigious areas.
The area is all about safety and lifestyle, and is one of the most sought-after residential areas in the country.
In all these locations, property markets have risen on the back of strong demand from wealthier buyers seeking security, lifestyle, and accessibility.
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