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Why it’s time to invest in coastal property

Property prices in many coastal areas have stabilised and in some instances are even starting to rise again, mostly on the back of increased investor interest.
 
“And this, it seems, is not confined to fashionable coastal resorts but also focused on picturesque small towns where free-standing seafront homes can often be had for less than a quarter of the price of similar properties in Umhlanga, Hermanus or Plett,” says Berry Everitt, MD of the Chas Everitt International property group.
 
Writing in the Property Signposts newsletter, he says that one of the reasons for this increased interest is the fact that much higher property prices in Gauteng, Cape Town and other big cities make it much more difficult for the investor seeking a retirement income to accumulate a portfolio of rental properties.
 
“However, a more powerful reason is that improved properties in smaller coastal towns currently offer really excellent value for money – and the real prospect of sturdy growth over the next 10 years.”
 
Everitt says new legislation recently drafted by the City of Cape Town provides a clear indication of how and why this will come about. “The legislation, currently under consideration, proposes the creation of a “zone” around the Cape peninsula's 300km coastline in which no further development will be allowed.
 
“This buffer zone will vary from 100m from the high water mark in some areas to as much as a kilometre in others, particularly on the West Coast, and its purpose of this will be to put paid to any more developments built ‘too close’ to the coast.”
 
He says that Gregg Oelofse, head of Cape Town’s environmental policy and strategy, made it perfectly clear what the council has in mind when he was quoted in the Cape Times recently. “He said the new legislation tied up with the national government's Integrated Coastal Management Act, but took it further by creating a coastal protection zone in which there would be no more land use changes, no more housing or private developments, no more developments like Big Bay, and that all that would be allowed in this zone would be the development of services like new stormwater outlets.
 
“Oelofse also noted that the coast was one of the Cape’s most important assets, economically, aesthetically and as a place which all the public could enjoy, and that the council believed it needed to move decisively to save what is left of it.
 “And we believe that if this legislation gets the expected public support, many other local authorities will introduce similar measures over the next few years - or at least much stricter coastal land use control measures in terms of the national Act.”
 
The obvious result of this, he says, will be that the amount of land available for new coastal development will quickly become very limited and that the prices of existing homes will rise as demand increasingly exceeds supply.
 
ISSUED BY CHAS EVERITT INTERNATIONAL


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