Coastal living has been a popular aspiration for many people, and this year has witnessed a significant increase in the demand for coastal homes.
According to Barbara Larney, broker/manager for RE/MAX Wine and Whales, The coastal property trend has gained traction nationwide, with 2020 (post-COVID) witnessing a surge in prices.
"Affordable options in this market segment are typically considered entry-level homes, catering to first-time buyers. The price range for these homes generally falls between R 2.2 million and R3 million, depending on the location.
"While these properties are smaller in size compared to their more expensive counterparts, they typically feature two to three bedrooms and a modest floor plan. Ranging from 150m2 to 200 m2 they offer sufficient space for comfortable living, with plot size averaging 600 m2," she says.
Cosy A-frame home, with a separate flatlet in Sandbaai for R2.790 million
Drawcards
The COVID-19 pandemic and growth in remote working have brought about significant changes for many families and individuals, prompting them to re-assess their lifestyles and consider alternative possibilities.
Hermanus has a well-developed infrastructure, including schools, healthcare facilities, shopping centres, and recreational facilities.
This coastal gem has also managed to preserve its unique character and appeal. The town's natural beauty, annual Whale Festival, wine routes, outdoor activities, coastal lifestyle, gastronomy, and cultural significance all contribute to its drawcards. As a result, Hermanus continues to captivate visitors and residents with its charm and allure amidst the changing urban landscape.
Key insights
There is a trend of families moving away from metropolitan areas which are characterized by high property prices, large populations and heavy traffic congestion.
Instead, these families are opting to settle in regional towns like Hermanus, that offer a healthier lifestyle.
There has been a noticeable trend of older people choosing to move into retirement homes, which creates new opportunities for younger individuals to move into areas such as Sandbaai and Onrus and embark on renovation projects.
Plot for sale with mountain view in Onrus for R1.499 million
There is a growing sentiment among some residents in Hermanus that the town has become increasingly busy due to an influx of younger families moving in. As a result, some longtime residents are choosing to cash in on their homes and seek quieter surroundings in towns like Gansbaai, Pearly Beach, and Struisbaai.
Family home with distant sea view in Gansbaai for R2.190 million
The phenomenon of improvement by younger new owners helps the aesthetics and functionality of existing homes, enhancing their market value. Renovations can also lead to the creation of more sustainable and energy-efficient living spaces, aligning with current environmental concerns. Furthermore, the injection of fresh ideas and creativity from younger generations inspires innovation and positive change within the community.
A home seconds from the shore-line in Pearly Beach for R2.950 million
Local businesses, such as construction companies, home improvement stores, and service providers, experience increased demand, generating job opportunities for the community.
Additionally, the influx of younger residents with more income stimulates the local economy by supporting local shops, restaurants, and other establishments.
North West yet to be affected by population growth
According to Lightstone Property, the North West Province is one of three provinces in South Africa – along with Gauteng and the Western Cape – where population growth exceeded the national average over the last 11 years. Despite this, local real estate experts report that this has yet to affect the local housing markets.
Within the North West Province, Klerksdorp, Potchefstroom and Rustenberg are the three largest towns in terms of properties formally registered at the Deeds Office. Lightstone Property reports that “[o]f the three, Rustenberg has more properties of higher value – just over 30% are valued at more than R1m, compared to just over 20% in Potchefstroom and slightly more than 10% in Klerksdorp.”
According to Adéle Cillié, Broker/Owner of RE/MAX Legacy, the demand for homes seems to be constant. “The annual fluctuations are merely repeated. We have, however, experienced a spike in demand for low-cost housing, more specifically in the R400,000-R600,000 price range.”
Upgraded family home in Stilfontein for R600 000
Apart from that, Cillié notes that the average housing price has remained fairly constant at around R1 million. “We have had the odd high-priced property every now and then. In general, house price appreciation is an average of 5% per annum. But this differs a lot according to areas. Student housing has unfortunately not had a constant appreciation the last few years (following the disruptions around the pandemic) and fluctuate a lot according to where the student flat is situated in relation to the NWU.”
Townhouse for sale in Lichtenburg for R1 million
Louise Snyders, Broker/Owner of RE/MAX Exclusive shares similar experiences in the Klerksdorp property market and notes that the increase in interest rates have caused an affordability issue to develop. “A lot of new listings are a result of this, which has caused price drops and lower offers being accepted. This has caused many buyers to look for a ‘bargain’. Buyers also take very long to decide on a property and often change their mind to rent instead,” she notes.
While the demand for full title security complex homes for an affordable price is increasing in Klerksdorp, Snyders comments that available stock is low. “House prices increased for a year after COVID but have since returned to the original prices before COVID. Yet, sellers still expect a higher value but realise after a while that they are unable to achieve the prices they want.”
Overall, Snyders notes that there has been a definite decrease in demand for properties in Klerksdorp. “I have noticed that the only semigration into NW Klerksdorp tends to take the form of Medical Professionals or refugee-status buyers. There tends to be more semigration away from Klerksdorp to Mossel Bay and other areas in Cape Town,” she notes.
Peaceful and picturesque setting in Klerkdorp for R6.760 million
Cillié, on the other hand, mentions that semigration has always played a role in house sales in her areas of operation. “Often families move to Potchefstroom specifically for our world-class sporting facilities, our university, and our nationally acclaimed schools. We see many people moving to the ‘countryside’ for various reasons. With Potchefstroom being approximately 150km from Johannesburg CBD and, with people working remotely, buyers prefer the lifestyle of the countryside that Potchefstroom has to offer.”
Sadly, Cillié notes that there has also been an increase in distressed property sales following the interest rate hikes. “There have been more buyers who took advantage of the lower interest rates, only to be caught off-guard and forced to place the property back into the market now,” she comments.
Stunning golf course view in Potchefstroom for R3.7 million
Despite this, Cillié still believes that Potchefstroom could be an ‘investment hotspot’ for future growth. “Because of our university, sporting facilities, and top schools, Potchefstroom will always be blessed with investment opportunities, and investors. The region has grown in leaps and bounds over the years. Potchefstroom's rich history is in itself a big drawcard. And, again, the fact that Potchefstroom is so close to Gauteng and is still a growing area, points to future growth and the possibility for greater returns on investment,” she notes.
“While the current market seems to be filled with highs and lows, we remain positive and committed. The buying and selling of property simply carries on. It is truly never ending regardless of interest rates, or any other adversity faced,” says Cillié.
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