House Buying, Land & Property Market in South Africa
Add to that, that the house prices here are an absolute bargain compared to the northern hemisphere, where house prices are exorbitant.
Many people have realised that South Africa is an oasis and have been quick to snap up properties here. Favourite location for many is the cosmopolitan and exciting city of Cape Town, but this has slightly over-heated the market in the last 5 years, pushing up prices quickly. Thankfully tho’ just an hour or so away from the buzz of the city centre there are still many bargains.
Somerset West which is just 40 minutes east from Cape Town sits on the sea of False Bay - or Hermanus with the pretty Walker Bay coast, which is 1½ hours drive away. Each town has many desirable houses on the market that are easily within the price reach of many.
Report from 28th Feb 2016 - Courtesy of www.property24.com
Hermanus Property has become a hot commodity, with buyers now forking out up to R24 million for a luxury home in the village. New developments are also selling like hotcakes.
This is according to Reon van der Merwe, Seeff licensee for the area, who says last year was the most active for the market since pre-2007/8, with sales topping the R1.2 billion mark.
“In many areas, our agents could not keep up with the demand and properties were selling almost as fast as they were listed, or advertised in the case of new developments.”
Van der Merwe says they are not sure whether it was a last minute rush by buyers to still get their hands on property in the village, but they have had the busiest November or December period on record.
Buyers came from all over the country, especially from Gauteng and the northern provinces, and he says there certainly was a sense of urgency to secure property in the Cape.
“Some days, our offices looked like a mall with people doing their last-minute shopping before Christmas, with up to four to five groups of people waiting to be served in our new Onrus office.”
Van der Merwe says in the Onrus or Vermont area alone they sold nine of these properties, ranging to a beachfront property that sold for a record R14 million. The previous highest price achieved here was R10 million, set in 2013.
“In Hermanus itself we also sold a number of properties over R5 million. Even in Sandbaai we concluded a R3.9 million - the second highest price achieved over the past two years.”
New developments also attracted significant interest, says van der Merwe.
“We have not seen any real fallout or negative impact from the national economy. Hermanus boasts a micro-economy that bodes well for the future, and despite the anticipated economic challenges, we are confident that this will be another active year for sellers and developers.”
Van der Merwe says Hermanus has come a long way over the last five years with a number of exciting developments around the central business area, as well as some new residential development, including beachfront apartments.
“Where it was once generally older people buying here, Hermanus now ranks as a vibrant coastal hotspot with a growing economy. It has become quite a trendy place to be seen come the holidays, or just about any weekend in between,” he says.
Van der Merwe says the development in Hermanus has been a positive influence for the property market. Where house prices used to struggle to reach the R5 million to R10 million mark, last year saw a number of R20 million-plus sales.
Even beachfront apartments can now easily reach prices of up to R13 million for a new unit with sea views,” he says.
Report from 2007 -
Prices in Hermanus currently start for 2 bed apartments at around R500,000 ($55,000), or 2 bed houses at around the R1 million ($110,000). Obviously there are many properties above these price tags but look what you get for your money – huge plots that can easily squeeze in a swimming pool and second property / “granny apartment”, with neighbours so far away. Beaches and coastlines that are so close-by, that a stroll along them could be a delightful daily ritual. Towns where there are parking spaces wherever you go and excellent restaurants that cater for all tastes.
Picturesque vineyards and wineries are everywhere and wine tasting is a must-do activity all year round.
The buying process is quicker and easier too, with most transfers taking only 6 to 8 weeks from offer to moving in date.
Cape Town’s city bowl prices increased by a whopping 60% in 2004 and plots of land were heading upwards fast too, with some appreciating at 20% to 30% per year. However since the 2008 crunch, prices have dropped again at the same % levels as the rest of the recession-hit world.
With South Africa’s growing black middle-class having more disposal income, they are also getting in on the act, as they are able to afford and are considering house purchases for the first time.
Below is a recent article from the Cape Town, Sunday Times Newspaper –
The super-rich home in on South Africa
Cape Town, Sunday Times, 18 March 2007 (by - Simpiwe Piliso)
Local properties costing more than R100 million featured on Forbes’s list of most expensive homes in the world.
The search for the super-wealthy client, with assets totalling at least $30-million, has hit the South African property market.
Estate agents are discreetly scouring for buyers to splash out a staggering R600-million on four luxury estates — two of which have cracked the latest Forbes list of the priciest homes on the international market.
Forbes has listed a private game farm and a wine estate for R185-million and R123-million, respectively.
A $6-million (R47.3-million) home in Umdloti near Durban also scored a mention.
Lucy Maher, Forbes’s lifestyle editor, said the annual property list was generally restricted to apartments and homes, but that “ranches or vineyards” now featured when the home on the site was worthy of such a mention.
A R185-million home near Plettenberg Bay has 12 bedrooms and stables, on a 1294ha estate. It is listed as: “Game farm complete with roaming lions, rhinos, buffaloes and leopards.”
A R123-million wine estate in Stellenbosch sits on 202ha and features a thatched manor built in the 1700s, extensive gardens, a game park and a wine cellar.
Maher conceded that the Forbes list did not include the most expensive homes in the world because owners in that category tended to sell quietly to “pre-selected” buyers.
Local estate agents with these properties listed in their books have declined to comment, citing non-disclosure agreements with the owners.
House price indicators in the latest edition of The Economist, show that the average price of a house in South Africa increased by 351% between 1997 and 2006.
Knight Frank, an international real estate company, recently called the country one of the quickest growing real estate markets in the world.
The Ritztrade International, a brokering service company, estimates the average house price in South Africa will be R1-million by 2010 — pocket change for the ultra-rich.
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