South Africans are increasingly moving to the Garden Route, pushing asking prices in the region sharply upwards, says Antonie Goosen, principal and founder of Meridian Realty.
Domestic semigration paired with international buyers also lapping up high-value properties have led to the area having a shortage of current property and vacant land stock, said Goosen.
He said semigration is no longer a buzzword, but a trend that has gained momentum since 2016 as people initially sought to move to metropoles with the best service delivery.
“This sparked the trend, initially, to move to the Western Cape. However, off the back of Covid and with the ability for some industries to work remotely, semigration gained traction but diverted into other parts of the country as people sought to escape traffic and congestion in search of a better quality of life.”
According to Property24, when looking at annual sales and listing trends on the Garden Route, in 2020, the number of sales registered at the deed’s office was 6,693, the average asking price was R1.75 million, and the average sale price was R1.25 million, said Goosen.
In 2021, sales rose to 9,857, the average asking price was R1.85 million, and the average sale price increased to R1.42 million.
“Looking at 2022, sales are currently sitting at 4,407, and this will rise over the remainder of the year; asking prices have increased sharply to an average of R2.25 million, and sales prices have increased to R1.55 million on average. The rise in the asking price is as a result of dwindling stock levels.
“Property24 confirms reduced stock levels with properties on the market in June 2021 at 23,238 and properties for sale in May 2022 (almost a year later) dropping to 15,078,” said Goosen.
Bert White from Meridian Realty said that even these stocks are inflated as they encompass all properties for sale. Properties with enough space to work remotely and offer the quality of life, scenery, and additional needs that ‘semigrators’ seek are placed in mid to high-end property categories where stock levels are particularly low.
White said that George is becoming an increasingly popular town for ‘semigrators’ as it has an airport, an abundance of schools, medical services, and larger town comforts. “George also boasts higher asking and selling prices as a result with the average 2022 asking price sitting at R2.29 million and average selling price at R1.8 million,” said White, citing Property24.
“What is staggering, however, is the stock levels which are at 3,205 across the property spectrum.”
White said that ‘semigrators’ are typically seeking three-to-four bedroom homes or more, with a focus on having space for remote work.
He said that the average asking price for a three-bedroom home is R2.75 million. This spikes significantly when you look at the average price of a four-bedroom house which is listed at, on average, R4.79 million and five-plus bedrooms listing at, on average, R5.98 million.
“One out of five buyers are moving to George due to the work from anywhere phenomenon. Most of these buyers are from Gauteng, followed by Mpumalanga and the Freestate. This has not changed since last year,” White said.
“In 2021 stock levels were already low – we saw buyers purchasing vacant land either in estates or free-standing erfs in order to build from scratch as the building was more affordable and interest rates were low. This year, virtually all the erfs are sold, barring a few in Blue Mountain Estate, Eden Residential Estate and Kraaibosch Ridge. Limited land, paired with high building costs, have caused buyers to shift to buying properties with the view to renovating more recently.”
Tinka Dunker, a Meridian Realty property professional based in Mossel Bay, also pointed to a lack of stock.
“Vacant land in estates like Nautilus Lifestyle Village in Mossel Bay is selling for R1 million and above. We recently sold a property in Nautilus and then resold the same property three months later with a price increase of R300,000. This shows how demand is pushing prices up.”
Pinnacle Point Golf Estate prices have seen record highs too, with buyers not just locally investing in the estate, but a major percentage of buyers are international investors purchasing property in the area. “I also see South Africans returning from abroad buying property in the area at high price points,” said Dunker.
Goosen believes the higher-end market will continue to move, albeit slower than before.
“The Garden Route can only accommodate so many people from an infrastructure point of view too, and this functioning infrastructure is what makes the Garden Route so attractive, so this cannot be compromised through over development.”
“Limited stock and land availability will keep prices high for now, although buyer resistance to increasing prices is starting to become a factor, especially in the middle to the higher end of the market. Renovating homes is becoming more of a trend, and even some retirement homes are being converted into homes on the outskirts of George to accommodate younger families,” said Goosen.