Somerset West property market is booming

The Somerset West property market is emerging from the recession hang-over with demand now beginning to outpace supply in the residential sales and rental sectors.

That is the word from Seeff's Somerset West manager, Loretta Diab. Following the rather depressed market conditions of 3-5 years ago, we have in the last year seen a noteworthy improvement in buyer enthusiasm and sales to the extent that our agents are now battling to meet both buyer and rental demand.

4 Bedroom House for sale in Somerset West

Driven by growing buyer confidence, sales have strengthened year-on-year over the last few years. In 2009, activity slumped to 967 sales to the value of just over R1,2 billion. By last year, activity had improved to about 1,387 sales worth almost R2,2bn - 43% up in terms of sales volume and 83% up in terms of the Rand-value.

While demand is still predominantly in the R1,5 to R5 million sector, we are seeing a resurgence in interest in top-end homes priced to around the R7-R8 million mark, says Diab. Following a robust first quarter, Seeff has just concluded a record month with R50 million in sales including several top end deals such as a luxury home in the Erinvale Golf Estate that sold for R7 million.
Diab says that cash deals are also on the increase as buyers are clearly more confident about investing into the property market. Their confidence is also not misplaced considering that the village has seen a better than average price growth of 8-10% over the last year. Noteworthy also is that about half of all of our buyers have been new entrants into the area, many of whom are migrating from other provinces, especially Gauteng. This has obviously been a boost to both the sales and rental market.

While we have seen an influx of buyers into the village, locals also continue to upscale and downscale according to their lifestyle needs. In fact, residents here do not easily move out, something that Diab says is adding to the stock shortages. The relaxed country lifestyle complemented by top class facilities and amenities and the close proximity to the winelands, Strand beaches, city and airport are big drivers of the demand. Families especially find the village an ideal environment for children. The surrounding mountains and rolling vineyards make it one of the most scenic residential areas and the quality of life and convenience is hard to beat - who would not want to live here, she says.

For buyers, the area offers great diversity in terms of property choices and prices to suit every budget. From entry-level apartments and starter homes, priced upwards of R1,1 million to comfortable three-bedroomed family homes priced between R2,5-R3,5 million, there is something for everyone. Even luxury buyers have much to choose from, says Diab. Luxury homes, often with stunning views as far as the False Bay coastline are priced upward of R6 million to around R30 million for a one-of-kind historic homestead on an 11,4ha estate. There are also a number of exclusive lifestyle and golf estates in the village with architectural homes, priced upwards of R7 million to around R22-R29 million for an exclusive Erinvale Golf Estate home. Also popular are retirement homes and here too, the village offers a range of options to choose from.

Conditions have improved markedly for sellers with buyers prepared to pay better prices, often quite close to the asking price although we are not yet seeing any kind of price bidding, says Diab. A notable benefit for sellers in the area is that most of the estate agents form part of a multi-listing service. While it is difficult to predict whether the buoyant conditions will persist in view of the uncertain economic environment, for now at least, sellers have the opportunity to take advantage of the favourable selling conditions, concludes Diab.

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