Although most of South Africa’s holiday towns have been severely affected by the economic fallout, some appear to be recovering more quickly than others. And there is certainly light at the end of the tunnel for the small historical town of Sabie in Mpumalanga, where sales are off to a flying start this year.
It’s perhaps not surprising that the town is beginning to bounce back. Set in one of the most scenic areas in South Africa and relatively close to the Kruger National Park, the area has always been regarded as a tourist hotspot by both national and international visitors.
Statistics that have been sourced from Lightstone reveal that the average price paid for freehold property thus far in 2012 is R808 000, up by almost 25 percent on the R610 000 average attained in 2011.
As with many of the smaller towns in Mpumalanga, 92.82 percent of residential property falls into the freehold sector of the market. The majority of the 36 sales that have taken place in the area in the last 12 months have fallen into the R400 000 -R800 000 price bracket. However, seven of the transactions concluded were priced between R800 000 and R1.5-million, which is encouraging for those who are looking to sell larger homes.
Sales volumes have been decreasing since 2004 when 151 sales were concluded. This drop in demand has undoubtedly put the average price paid under pressure. In 2007 for example, the freehold price average dropped to R404 000 from R509 000 in 2006. Likewise, the sectional title average dropped from R423 000 in 2006 to R227 000 in 2007.
The good news is that price averages since then have managed to slowly but surely inch up and, although the outlook for 2012 appears positive, it remains to be seen if this momentum can be maintained. Hopefully the trend is set and low bank interest rates, coupled with reasonable affordability, should encourage both potential property owners - and sellers - in this little gem of a town.
This said, don’t discount the cash buyer, as the statistics further reveal that over 50 percent of the sales concluded in the area in the last 12 months were cash transactions. South African banking institutions have loaned just over R10-million in the area in the last 12 months, with the highest single mortgage bond approved by Investec, a healthy R1.9-million.
The influx of cash buyers could be linked to the fact that 62 percent of existing owners and 31 percent of recent buyers fall into the over 50 age category. It is clear that the area appeals to an older, more cash flush set who are keen to take up retirement opportunities in this beautiful, peaceful part of the world. This, coupled with the second or holiday home market, could indicate that cash sales are set to dominate the property market for the foreseeable future.