Semigration and high demand are driving a bumper year in the scenic Garden Route town where record sales have been recorded since the end of the hard lockdown in June 2020, with 2021 already Plettenberg Bay’s best year to date.
This is according to Steve Neufeld, Manager Principal for Lew Geffen Sotheby’s International Realty in Plettenberg Bay who says that, although the year is not yet over and not all recent sales have been registered, it’s already clear that 2021 is set to surpass previous years.
“For the property market as a whole, the average value increased by 9% from 2019 to 2020 and then a dramatic 38% in 2021 to R3,4 million. From 2019 to 2020 the number of sales increased by 20% to 418, and the total value increased by 30% to R1,058 billion.
“Full title property increased by only 2.3% in average value from 2019 to 2020 and the number of sales increased by 33% to 315, but this year a spike of 43% saw the average value increase to R3,9million by September and sales volumes to R910 million with three months still to go.
“Although the sectional title sector isn’t performing quite as well as housing, it’s certainly not stagnating with an increase in average value of 17% from 2019 to 2020 and a further 8% this year. Interestingly, the number of sales declined by 7% from 2019 to 2020 as the total value increased by 9% to a little over R200m.”
He attributes the growth and market activity largely to two factors: increasing semigration due to the ‘newfound’ ability to work remotely and the increase in activity in the top end of the market.
“Buyers are still predominantly from Gauteng and Plett at around 30% each, although Gauteng is a little higher this year, followed by Cape Town (12%) with international buyers making up about 8% of the market.”
Neufeld says that although the Plett market has always marched to its own drum, the current boom has been somewhat of a surprise as economists were predicting a considerable decline of around 8% post-lockdown due to the combination of recession, national structural problems, and the effect of lockdown.
“They did, however, warn that the property market is slow to react. The expected oversupply of property did not happen, and estate agents are complaining of stock shortages with a 30% decline in properties for sale from June 2020 to September 2021 which puts upward pressure on prices.
“Most estate agencies are reporting record sales this year, ourselves included. By mid-September, we had already brokered over R672m worth of sales since January.
“To put this in perspective, the slowest year in Plett in the past decade was 2011 where the total sales for the whole town were R453m and between 2016 and 2018, Plett’s totals were just over R1 billion each year, dropping to R812m in 2019. In 2020 we breached the R1 billion mark again and we did so again by September this year.”
The previous historical record sale price of R50m for residential property, which was set in 2006, was beaten this year with the sale of a R55million beachfront home on Beachy Head Drive. In 2020 the highest price achieved was R44million for a beachfront home in a gated estate on Robberg Beach and in 2021 there have already been 19 sales above R10m.
Neufeld adds that entry-level prices are increasing this year.
“Full title homes now start at about R1.85m, up from R1.75m in 2020 although, with stock shortages, it’s hard to find anything below R2,2m and the entry-level for sectional title units has increased from R750 000 to R950,000. Vacant land starts at about R295,000 in gated estates and R525,000 in open areas (up from R425,000).”
Hein Pretorius, owner broker of Lew Geffen Sotheby’s International Realty Plettenberg Bay, says: “Last year was an excellent year for us, but 2021 has been phenomenal. We surpassed 2020 sales in the first quarter!
“Across the board, the market is doing exceptionally well. The top end of the market has been increasingly active again and there is little or no vacant land left in the more popular gated estates.
“Part of the reason sectional title has not performed as well as full title is due to availability; about a quarter of our stock are apartments versus over 60% full title properties, and Plett also generally has very few high-end flats built which bring averages down.”
“We have, however, launched a brand-new luxury development off-plan called which is doing well; ten of the twenty-two sea-view apartments are taken already, and it has only just become available.
“The Plett Quarter is in an excellent location on Main Street at the Dolphin Circle and includes commercial and hotel components on the lower levels, with a spa, a pool, and ‘sky bar’ on the upper levels which owners will be able to use.”
Pretorius adds that with stock shortages are becoming a problem, now is an excellent time to sell.
“If you are thinking of selling, there are keen buyers around and you can achieve a decent price for your property. And those thinking of buying, should do so sooner rather than later as interest rates are low, asking prices are rising, and in the long-term Plett will retain its popularity. There are still a few good value properties available, but stock is declining.”
