The December holidays are upon us and while many will be heading off for a welcome break, others will have a more serious agenda in mind and will be looking to invest in a holiday home.
Many of South Africa's holiday hotspots have taken a bit of a beating during the downturn. Property prices have fallen drastically in certain areas and those who are looking to invest in a second home may well be surprised at what is on offer - and at what price - in these regions.
Cheryl Anley, broker/owner of RE/MAX Prime Properties which operates in the Plettenberg Bay area, says that while the demand for leisure property has remained fairly muted, now that the property market is well into the recovery phase, demand for leisure properties has slowly started to increase.
This delightful 3 bedroom cabin in Plettenberg Bay would make the ideal holiday home. There are mountain biking trails in the forest. Bird life is prolific and wild pigs, monkeys and bush buck roam the area.
"Although property sales in Plettenberg Bay were quiet for the first half of the year, the second half has seen an increase in activity. Sales and prices took a serious knock over the past three years," she says. "Sales volumes are still recovering and certainly prices are not yet rising and are still in a stabilising phase. Therefore purchases with the idea of a quick turnover are not advised. However, we have seen an increase in the volume of sales over the past six months. We believe that we are close to the bottom of the property cycle and it will only improve from here on, albeit slowly. There has surely never been a better time to buy property."
Adrian Goslett, CEO of RE/MAX of Southern Africa, says that the leisure property market always lags behind the property cycle by around a year to 18 months. "Therefore, while noteworthy recovery is not expected in this sector for some time to come, there are currently great leisure investment opportunities available to buyers. However, as with any property purchase, a good investment decision can only be assured if a buyer has done all the necessary homework and comparisons and is sure that the investment they are making is worth the financial commitment they are laying down to acquire it."
Although agents in Gordon's Bay in the Western Cape say that the area weathered the recession fairly well, the fact that properties in the town offer good value for money has boosted sales in this quiet town.
"The charms of Gordon's Bay remain relatively undiscovered," says Paul Matthews of the local RealNet franchise. "However, we are now seeing an overflow of buyers from more high-profile destinations such as Hermanus. Many upcountry buyers report that they were scouting for coastal property in surrounding areas and discovered the good value and attractive lifestyle of Gordon’s Bay quite by chance."
Word of the good buys available in the town is spreading, however, and the number of new residents is growing steadily. Yet, says Matthews, prices remain realistic and the market is stable.
He says property prices start at just less than R500 000 for apartments, however, few are available in this price range. Most apartments sell for between R550 000 and R950 000. Matthews adds there is also something of a divide in prices of properties with and those without views. "Anything with a view should sell at upwards of R1-million, and the price is worth the sweeping northerly views many units offer. Another plus is that building in Gordon's Bay is restricted to three levels, and we consequently enjoy a town on human scale, instead of being dwarfed by high-rise buildings."
Although well-known and regarded as a holiday hotspot, Margate on the South Coast of KwaZulu-Natal has also experienced the full brunt of the recession. The area went through a development explosion during the boom and many second-home owners struggled to sell at the inflated prices they had paid when demand was high.
Despite this, Willem Erasmus, principal of the Acutts Margate office says if one looks at the property statistics, the area has seemingly held its own in terms of value. However in his experience, a sectional title unit which would have sold for around R1.3-million in 2006 will now sell for around the R1.1-million mark. "Sales have improved over the past two years, although the demand is generally restricted to properties priced between R600 000 and R1.2-million."
He says that the average price of a two bedroom unit is R750 000, while a three bedroom unit will cost R1-million.
"Buyers are acutely aware of market conditions. They have done their homework and shop around to compare prices. They will not buy unless they feel they are getting real value and this usually entails getting the property at a discount. Buyers want to know how much the seller paid for the property, as well as asking to see transfer data that indicates what similar units have sold in the past."