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Hermanus market back in the swim

Once renowned as an elite holiday destination – and relatively undeveloped fishing village - the Overberg town of Hermanus has a very different face today.
 

The view from a two-bedroom seafront apartment in Hermanus that features many luxury fittings and finishes and is on the market through Chas Everitt Hermanus for R6,6m

Now recognised as the world’s foremost land-based whale watching destination, it has a burgeoning tourism sector and has also experienced an influx of permanent residents over the past few years. This has given rise to the development of more retail facilities, for example, as well several upmarket estates, new schools and even a new hospital.
 
“In short, it has become the busy hub of the Overberg area,” says long-time Chas Everitt International Onrus franchisee Dean Meijer, who has just opened a new office in Hermanus. “And the increase in the number of professional and business people who work in Hermanus has definitely boosted home buying activity in this region over the past year, especially in the R800 000 to R1,5m price bracket.
 
“At the same time, we have seen a really significant increase in the demand for long-term rentals.”
 
Apart from the lifestyle on offer, a key attraction for the buyers - and investors -currently moving into this area, he says, is that prices have not really begun to come off their three-year lows yet,although this is on the cards as the market continues to improve and the existing stock is absorbed.
 
“Like most coastal towns, Hermanus and the nearby areas of Onrus, Vermont and Sandbaai were all negatively affected by the downturn in discretionary spending following the 2009 recession, with consumers definitely thinking twice before buying or building a property just for holiday or weekend usage.
 
“This resulted in a stock oversupply and drop in prices that has not yet been fully overcome. Consequently, it is still possible now to acquire a stand in this region for as little as R300 000, or a sectional title flat away from the beach for around R500 000. And prices for freehold homes in the outlying areas start at around R700 000, although they are of course much higher in the secure estates and in Hermanus itself can reach as much as R25m for a seafront property on Millionaire’s Mile.”
 
The current buying activity is also being fuelled, says Meijer,by the fact that home loans are being granted relatively easily for properties in Hermanus. “The banks are finding good value here and although they are still applying strict affordability criteria, a 10% deposit together with a sound credit record will usually secure the loan.”
 
As for buy-to-let purchases, he says, rentals are also set to rise, because almost all residential development in the area came to a standstill after 2009 and it is going to take several years for supply to catch up with the current demand, especially for long-term rentals.


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