Franschhoek remains a popular destination

Originally settled in 1685 by French Huguenots who fled their homeland, Franschhoek was originally named Elephant’s Corner after the vast herds of elephants that roamed there. But soon after the French settled, the area changed its name to Franschhoek (French Corner). The heritage of these first settlers lives on today through the Huguenot monument situated at the top of the village.

While Franschhoek is not generally considered as a holiday destination by South Africans, it remains popular with overseas guests especially those from the UK, Netherlands and Germany.

This is according to Peter Hager, Broker/Owner of RE/MAX Prestige Country Properties, which services Franschhoek. He notes that Franschhoek has, and always will be, a sought after and desirable location for both local and foreign property investors.

“In the past, investment in Franschhoek was divided equally between local and foreign buyers. However, that demographic has changed and we now have more local investment entering our market than foreign. A large number of buyers in the area are parents whose children are going to Stellenbosch University as they want to be close to the university but don’t want to reside in Stellenbosch,” says Hager.

Speaking particularly of the leisure property market in Franschhoek, Hager says that it has performed well as far as demand is concerned; however, property appreciation and selling prices have dropped due to the global downturn.

Adrian Goslett, CEO of RE/MAX of Southern Africa, notes that since the South African property market has resumed to normal conditions, it is anticipated that demand for leisure properties will slowly increase. “However,” he says, “it should be remembered that the leisure property market always lags behind the property cycle by about a year to 18 months. Therefore, while noteworthy recovery is not expected in this sector for some time to come, there are great leisure investment opportunities available to buyers.”

The most popular leisure properties that Hager currently has available are two-bedroom cottages with swimming pools, or apartments in secure complexes with pools which are priced between  R1,5 million and R4 million.

He says that overseas investors often place their holiday homes in a letting pool. For example, Hager is currently marketing a two-bedroom, two-bathroom cottage with a country kitchen and lock up garage for R2,5 million. This home has, in the past, provided its owners with R250 000 per year in rental income from holiday lets. “This home would usually sell for R3,5 million, which would be the price we would expect to achieve as the market improves.”

Full title properties, which account for close on 60% of the area’s total properties, according to Lightstone, a property data provider, are in higher demand among leisure buyers as the sectional title levies and increased care costs often put leisure investors off.

“While not a typical seaside holiday spot, Franschhoek holds the lure of culture and history, exceptional cuisine, a solid property investment market, along with excellent wine tasting and wine farm visits. The appeal lies in the fact that it is away from the crowded mass of beach holiday makers but close enough to go to the beach and Cape Town for all the tourist attractions should one so wish,” Hager concludes.

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