Younger buyers for Boland and Overberg

“Over the first six months of the current financial year (March to August 2011), our most significant growth sector was buyers in the age group from 20 to 29 years, where we saw an increase of more than 60 percent.  This is a very encouraging sign, which supports reports that more first-time buyers are entering the market.  It’s clear that they are realising this is the ideal time to buy their first home, taking advantage of lower interest rates and capitalising on the prevailing market conditions, which are delivering excellent value for money.  

The average sale price for this age group was R950 000, and a number of these buyers have found excellent value in new developments such as The Village at Diemersfontein Wine Estate outside Wellington.  Here one can acquire a two-bedroomed house from just R699 000 or a three-bedroomed home for up to R1.5 million, making it ideal for young couples wanting to start a family, as well as for investors,” says Borg. She adds that if banks further relaxed their lending criteria it would stimulate this sector of the market even more significantly.

Upturn in sales over previous winter

While the property market in general remains under pressure Borg says the company is seeing clear signs of an upturn in market activity in various areas within these regions, with a noticeable increase in sales volumes and values.  Over the first six months of the financial year (March to August 2011), Borg says PGP’s totals sales value in the Boland and Overberg regions rose to close to R650 million – an increase of 34 percent on the same period for 2010.  The number of unit sales increased by 14 percent, to 310.

Borg says the highest demand at present is for homes priced between R800 000 and R3 million.  “The bulk of our buyers continue to be existing Western Cape residents,” she says, “many of them relocating within their home towns or else relocating from Cape Town into smaller towns.  The benefits of ADSL and wireless networks are certainly allowing more people to consider working from home or via a remote office in a quieter rural setting.  We are also seeing relocations from those working in Cape Town’s Northern Suburbs, for whom the commute to Paarl or even Somerset West is easily manageable.”

Other purchasers include upcountry residents, mainly from Johannesburg and Pretoria. While the appeal of predominantly Afrikaans-speaking towns may be a key factor in this sector, Borg says other factors offer major appeal for families.  “Many are high-flying business people wishing to settle their families in a small town with good schools, sound family values, a healthy outdoor lifestyle and a low crime rate,” she says.  “This enables them to commute all over the country for work with greater peace of mind regarding their family’s security.”

Borg says there are few international buyers at present, but believes this may begin to change in the coming summer months, due to the weaker rand.  “The months of October and November are the prime international tourist season for the inland towns of the Boland,” she says, “while December and January see a huge influx of visitors to the coastal areas of the Overberg, such as Hermanus, Kleinmond, Pringle Bay, Betty’s Bay and Onrus.  We feel confident that the current exchange rate, coupled with the excellent value for money on offer, particularly in the second home/ holiday home market, may attract more international-spend on property.”

Given the fact that property prices have remained relatively flat in recent years, there are now plentiful opportunities to acquire good buys.  “For example,” she says, “in a popular area like Hermanus or Onrus, one can now acquire a three-bedroomed home with good quality finishes and sea views, located in one of the popular suburbs, for  R1.8 million to R2 million.  That’s an excellent value proposition for European ‘swallows’ seeking a summer home at the coast – or for that matter for South Africans wanting to acquire a holiday home.”

Pockets of strength

Several PGP offices in the Boland and Overberg regions have posted unexpectedly strong results for the financial period. Among those which stood out in performance through the winter months was Hermanus -  bucking its traditional trend, as typically this is a summer town whose property market slows down considerably during the average winter.  Despite this, during the mid-winter months of June, July and August (2011) this office concluded transactions to a total value in excess of R20 million, with the figure escalating to close on R70 million for the full half-year (March-August).  The average PGP sale price was just over R2 million.
Sales included the following:
  • A double-storey family home in Fernkloof Estates, with four bedrooms and three bathrooms, sold for R2.9 million
  • A brand new family home in Fernkloof Estates, with four en suite bedrooms and a swimming pool, sold for R2.8 million
  • A three-bedroomed family home in sought-after Voëlklip, Hermanus, which sold for R1.7 million
  • A three-bedroomed townhouse within walking distance of the main Onrus beach, sold for R1.175 million.

PGP’s Somerset West branch also performed exceptionally well, reflecting an increase in sales turnover of more than 50 percent compared to the period March to August 2010, while total unit sales increased by over 45 percent.  Among the notable sales was a three-bedroomed home in the sought-after Schapenberg Estate, situated in over 1500sqm of landscaped gardens.  The property, which has sweeping ocean and mountain views, was sold for R2.55 million.

Borg adds that Swellendam has enjoyed one of its best years ever, more than tripling its total sales value when compared to the March to August trading period in 2010.  “Sales ranged from the lower end of the market in the price range from R600 000 to R800 000, to heritage homes sold for between R2.4 million and R2.7 million, as well as several lifestyle properties which were sold at prices ranging from R2.8 million to R4.3 million.” Among the most notable sales was that of an historic 18th century Cape Dutch home in the Drostdy Museum precinct, a national monument which is currently run as a guest house.  It was sold for R2.7 million.

Concludes Borg: “The Boland and Overberg regions remain popular with buyers across the spectrum, from first-time entrants to the market to families seeking a wholesome lifestyle with access to good schools, and lifestyle buyers seeking to acquire small farming units.  The easy access to Cape Town as well as sizeable towns such as Paarl, Somerset West and Stellenbosch means that one can enjoy the best of small town living, while still being within easy reach of major infrastructure and amenities,” she says.  “We anticipate that the appeal of this lifestyle will continue to attract increasing numbers of buyers as the market improves into 2012.”

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