The property market across the Garden Route and Eastern Cape performed better than anticipated in 2016, according to Seeff Property Group.
Tony Ketcher, regional manager for the Seeff property group’s operations across the region said most branches recorded some of the best activity in over five years.
The latest Lightstone data for the Eastern Cape shows that while the East London metro experienced a decline of just over 10% in overall transactions, it still generated just over R1.68 billion in value.
In contrast, Port Elizabeth only experienced a marginal decline in overall transaction volumes, but achieved a higher overall value of over R3.68 billion.
The bulk of transactions were below R1.5 million. Both centres show a notable increase in younger buyers with the under 35-year millennial age group representing about a third of all activity for the last year, Seeff said.
Stefaan Verlinde, licensee for Seeff Oudtshoorn says that the agency experienced a 22% increase in sales since 2015 and expect a further 10% rise this year. That, he said, would though depend on enough well-priced stock coming onto the market. “Right now, the bulk of the listings are overpriced and buyers are just not seeing value.”
Well-priced properties are still selling for within a month, said Verlinde, adding that agricultural property is also seeing high demand. An influx of people from other provinces is fuelling the demand across the board, from sales to rentals and there is now a shortage of rental properties.
The R880,000 to R1.2 million range is the most popular and for rentals, the R4,500-R6,000/month range.
The coastal town of Jeffreys Bay is another area that reports a positive outlook. Gerrie Nieuwenhuis, Seeff’s licensee for the area said that the agency experienced a hike in overall sales of 8% since 2015, but he has observed a slow-down towards the end of last year, especially for second holiday and retirement properties.
“The banks are very right on lending in the secondary homes market and we are seeing the demand for deposits beginning to creep up again,” Nieuwenhuis said.
“On the whole, anything below R2 million still attracts attention, but above that, we expect only selective interest. The highest demand is in the R800,000 to R1.2 million range for a standard three-bedroomed house.
“It is also mostly older buyers who are buying here. Only 14% of the sales fall below the 35-year age group. The rental market is also still busy with the biggest demand in the R4,500-R7,000/month range.”
The Garden Route is especially upbeat, said Ketcher. The area clocked up an average price growth of 5%-7% on the whole, but with obvious exceptions in some centres.
Prices on the Garden Route are also well below what you would pay across Cape Town, up to half in some instances, according to Seeff.
With an international airport, busy commercial hub of George and Mossel Bay and excellent schools, it makes sense for buyers moving here from other provinces, especially Gauteng and the northern regions, the property group said.
Overall activity for George is about 5% up since 2015 and the market yielded about R1.5 billion in total value. Neighbouring Mossel Bay was marginally down in volume terms, but still yielded R1.22 billion in property transactions for the last year. Almost 40% of activity are attributable to families, often migrating here from other areas, Seeff said.
Plettenberg Bay meanwhile topped a record R1 billion in total transactions last year and according to Kevin Engelsman, Seeff’s licensee for the area, clocked up 32% more activity compared to 2015.
Here too, there has been an influx of people moving from up north to the coast with the R1.5 million to R3 million price bands being the busiest.
Engelsman expects 2017 to slow down, although hopefully at least remaining on par with last year, he added. “There has been a definite improvement in the demand for second and holiday homes as well as retirement properties, the additional flights to Johannesburg being a big boost in this regard. We are now experiencing a shortage of stock in the lower price bands.”
Knysna too report a busy 2016 and an optimistic outlook for this year. Gail Giannone, managing director for Seeff, said that central Knysna and the waterfront areas such as Thesen Islands are especially in demand, fuelled by an influx from Gauteng and the Cape.
There is a severe shortage of rental properties in the town and a single listing can easily attract twenty or more applicants, said Giannone. In general, the biggest demand is for properties below R2 million and for rentals at around the R5,000/month range.