A recent visit to Knysna confirmed the town’s reputation as a natural wonder and playground for the rich and famous but property activity in the area proves that even this well-to-do property hub is not immune to the effects of the global financial crisis.
I had an inkling that the area might be under pressure when I noticed a fair amount of properties were up for sale. Upon mentioning this observation, a friend whose parents live in the area agreed that the local property market has taken a knock and that the bulk of the properties currently on the market are holiday homes which are being sold by far flung owners who can no longer afford them.
A local real estate agent backed up these comments. The agent explained that many of the holiday homes on the market were bought during South Africa’s property ‘boom’ when credit was easily accessible and the economy was robust. Times have obviously changed though and the days of being able to afford an expensive second bond, coupled with the monthly rates and levies of a holiday home that’s only used a few weeks each year is a luxury many can no longer stretch to.
Thesen Islands, Belvedere Estate, Leisure Isle, Simola Golf and Country Estate and Pezula Golf Estate are arguably some of the best known upmarket nodes associated with Knsyna with property prices at these enclaves ranging anywhere from R2.5 million to R20 million. Prices at Thesen Islands for example rarely dip below R3 million but owners are reportedly waiting up to 18 months to find willing buyers.
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And it’s not just Knysna’s holiday home market that’s feeling the pinch. According to reports, home prices across the board in Knysna are down 25 to 40 percent from their previous peak levels and many of the area’s homes are being sold for significantly less than their original asking prices.
But it’s not all doom and gloom. Properties are still moving with the most activity occurring in the R1m to R2.5 million bracket. Foreign nationals, particularly British ex pats continue to retire to the area given the favourable exchange rate and year-round warm climate. The fact that stock is plentiful is also great news for first time buyers and investors as it means they can get their foot in the door of a truly idyllic part of the country.
And what an area. Knysna forms part of the Garden Route and occupies the northern shore of a large warm water estuary which opens into the Indian Ocean after passing between Knsyna’s famous sandstone ‘Heads’. The area is rich in both history and natural attractions such as the ‘Featherbed’ private nature reserve which can be reached via paddle steamer. The famous Tsitsikamma Forest also lies within relatively close reach.
Visitors can take their pick of outdoor activities which include, amongst others, horse-riding, hiking, fishing, golfing, canoeing and scuba diving. During the months of May and September, Humpback and Southern Right Whales visit the coastline which has whale watchers flocking to the area in their droves. Those who take a more sedentary outlook on life no doubt appreciate Knysna’s many fine shops, restaurants and quaint cafes which offer everything from boerewors to oysters (of course) and locally brewed beer.
Add to this mix a low crime rate, galleries, graceful old-world churches, festivals, chocolate-box pretty Cape Cod-like properties, an elegant yacht club and a host of B&B’s and hotels and it quickly becomes apparent that Knysna has a lot going for it and that the property market is simply reflecting current market trends. Indeed, with so many aspects working in its favour one can’t help but think that Knysna is the ideal place to make a long term property investment.