Value for money crucial in Hermanus

Property sales in Hermanus are picking up, but value for money remains the most crucial factor for buyers in a number of price brackets.  

So says Adrian Kuiper, Pam Golding Properties’ (PGP) area manager for the Hermanus region, incorporating Hermanus and surrounding satellite towns such as Onrus, Sandbaai and Vermont. PGP sold more than 50 properties in this area in 2011, to a total value of over R120 million.    

The majority of buyers were Western Cape residents seeking holiday or retirement homes, although a few properties were sold to buyers relocating to Hermanus as permanent residents.  The majority of these sales were freehold properties, apart from a few seafront apartments sold on a sectional title basis. Kuiper says buyer interest was steady over the festive season and has remained so into the first quarter of 2012.

“The summer season was busy,” says Kuiper, “with our agents in Hermanus selling 12 homes from October 2011 to early February 2012, and PGP agents in Onrus and Vermont selling a further seven properties.  One of the most encouraging factors was the interest from clients who have been contemplating buying for several years, but have now decided that the time is right to commit and purchase property.  We also received some tentative enquiries from foreigners, the first in a long time.  The area enjoying the highest demand at present is the beachside suburb of Voëlklip in Hermanus, while Fernkloof Golf Estate is also attracting steady enquiries.  In general, however, buyers are being driven by value ahead of location, and want the right home to suit their needs, at the right price, rather than a home in a particular suburb.”

PGP’s MD for the Boland and Overberg regions, Annien Borg, says the bulk of interest at present is in the price bracket below R3.5 million.  “PGP’s average sale price in Hermanus from March 2011 to mid-February 2012 was R3.13 million,” she says, “with our lowest-priced sale being a plot in Voëlklip sold for R335 000 in January 2012.  In nearby Onrus and Vermont, our average sale price for the same period was significantly lower at R1.12 million - but this is not unexpected for smaller satellite towns with fewer luxury homes.  Our sales in these towns ranged from R475 000 for a 621sqm vacant stand sold in May 2011, to R1.94 million for a home on 1400sqm, located just 200m from the sea, which was sold by PGP in July 2011.”

In these satellite towns in particular,” Kuiper adds, “a number of our sellers are mature residents who are contemplating moving to retirement villages, and have fairly fixed expectations of the selling price they need to achieve in order to fund their retirement years.  The high rates of some retirement facilities may also place additional financial pressure on them.  Coupled with this, many of these buyers are not under immediate pressure to sell, and with buyers at present being so strongly driven by value, and aware of prevailing market conditions, it can be difficult to find middle ground. The fact remains that buyers are only prepared to pay market-related prices for property.”

Kuiper says there is limited interest at present in the mid-market price category from R3.5 million to R6 million, possibly because buyers in this bracket are fairly mortgage-dependent, and therefore restricted by the banks’ stringent lending criteria.  “However it is interesting to note that we have had a recent increase in the number of clients looking at homes in the top-end category, from R6 million up to R20 million,” he says.  “For example, in March 2011 we had a single buyer purchasing a six-bedroomed seafront home in Kwaaiwater for R14.5 million, as well as an adjacent vacant erf for R9.5 million.  We sold another home in the same area in December 2011, for R10.6 million.  Buyers in this category, like any other, are looking for value opportunities, and are mainly seeking prime holiday locations, on the seafront itself or close to the sea.  Most of our top-end buyers have been locals from the Western Cape, although there have also been several enquiries from buyers based in Gauteng.”

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