FNB has published its latest residential property barometer, outlining where South Africans are choosing to buy their holiday homes right now.
The group’s data shows that while holiday home buying remained relatively muted in 2019, Durban has received increased interest.
Data shows holiday home buying to have nudged up to 2.5% (of the total property transactions, nationally) in the fourth quarter of 2019, after a recent low of 2.3% in Q1 2019.
“The marginal improvement could also have been supported by easier lending standards, particularly in the second half of 2019, FNB said. “Nevertheless, this is still below the historical average of 2.7% (since 2007) as well as the recent peak of 3.5% in Q1 2018.”
FNB noted that holiday home buying appears to be migrating away from Cape Town and towards Durban. This could be attributed to the relatively better price points relative to Cape Town, FNB said.
“Notwithstanding, holiday home buying in Cape Town remains robust, assisted by the recent downward price adjustment in the affluent regions.”
Recent data from Seeff shows that Ballito’s permanent population has more than doubled from 12,000 to 30,000 in just over a decade, creating a big rental demand in the coastal town.
However, this popularity has come at a cost and a recent report AfrAsia Bank and New World Wealth shows that it is now more expensive to buy property in Umhlanga than in Sandton.
According to the report, Cape Town is ranked as having the most expensive property on the continent at $5,600 per square metre (R82,160).
It is followed by Umhlanga at $2,800 (R41,000) per square metre and Sandton at $2,600 (R38,140).
The Monetary Policy Committee reduced the repo rate by 25bps on Thursday (16 January) in order to help kickstart the economy and foster increased confidence among consumers who are feeling the pressure of ever-rising costs.
Dr Andrew Golding, chief executive of the Pam Golding Property group, said that with subdued growth and muted inflationary pressures, the Reserve Bank’s decision is welcome – particularly given the heightened uncertainty ahead of the 2020 Budget speech and likely downgrade of SA’s credit rating to junk status by Moody’s in March.
“Yet despite the ongoing economic challenges faced, including the reintroduction of load shedding, we continue to see signs of green shoots in the residential property market place.
“Having experienced a period of correction in regard to house prices, first-time and a mix of other home buyers are seeing the market in a positive light, further buoyed by financial institutions’ robust appetite for lending. This is enabling more aspirant buyers to gain a foothold on the property ladder.”
Golding said that pockets of solid activity are evident in all markets, for example metros where demand is outstripping supply, including coastal markets and secondary coastal towns, but particularly frontline coastal property which has consistently retained value, as well as commuter belts which have high appeal for those seeking a convenient live, work, play lifestyle.
“With developments remaining in high demand in the burgeoning North Coast node in KwaZulu-Natal, our offices in this region report a busy festive season in this regard, with enquiries from Gauteng on the increase. The areas in highest demand are well-priced family homes under R4 million in Durban North, and security estates in uMhlanga, where we have also concluded some top sales such as a recent sale of over R11 million in Oyster Rock.
“In addition, our Ballito office experienced a high degree of enquiries and interest in December (2019), with sales to the value of R46 million. Here we also noticed a move toward estate and lifestyle homes ranging in price from R2 million to R10 million.”
Added Dr Golding: “In the university town of Stellenbosch in the Cape Winelands we currently have a significant number of enquiries for student apartments, mainly between R1.5 million and R2.5 million, both from parents as well as investors – the latter a reflection of increased confidence in the investment market.
“Elsewhere in the Western Cape, Cape Town’s Southern Suburbs experienced a busy December, while the rentals market generally was very active, especially in the middle to lower end and with short-term lets up from last year. Sales in the Cape Town metro, including the Western Seaboard, were mostly active in the price band up to R3 million.”