The announcement made recently by Housing Minister Lindiwe Sisulu that electricity supply shortages would not affect new residential property developments requiring less than 100KW is reassuring for property market watchers in the Western Cape’s Overberg district.
After an almost non-existent market for sectional title units over the past couple of years, developers have moved in en masse and new developments are rising steadily in the six towns that make up the Cape Agulhas region.
“The areas of Bredasdorp and Struisbaai, particularly, are experiencing growth at present and a lot of interest from up North,” says Strepies van Wyk, principal of the local franchises of Realty 1 International Property Group in the Overberg region, which includes Agulhas, Napier, Bredasdorp, Struisbaai, Arniston and Suiderstrand.
“Currently we have a number of new developments on the market at various prices and sales are happening.
The Oude Weelde in Napier has 10 character cottages that each has a private farm-style garden. The prices range from R395 000 – R650 000 and four out of the 10 units has been sold so far.
“It’s a secure, lock-up and go lifestyle, and the cottages mostly seem to attract clients over 50 years of age,” says van Wyk. “Then there’s De Oude Arena in Bredasdorp, a secure, upmarket complex with 32 duplexes called the Stable Quarters which sell from R660 000, and 45 single residential units selling from R1,18m each.” The complex is located on the town’s historical show grounds and Van Wyk believes the units are good value for money.
“When the homes are complete, the quality finishes will give a modern feel to the inside while the outside will have an old-world historical feel,” she says. “The first houses in De Oude Arena are almost finished and are on show daily from 10 am. Since construction started, buyer interest has stirred.”
Van Wyk believes the various towns in the area each have their own unique characters. Bredasdorp and Struisbaai seem to be the ‘hot spots’ at present, particularly for residential activity. L’Agulhas and Arniston are what she calls ‘end destination’ – places where people come to retire.
“The proposed L’Agulhas Links will bring substantial change to the area,” says Van Wyk. Details of the Links have yet to be announced. Meanwhile, The Sandpipers in Struisbaai is offering sea-side architecture with stone cladding and natural finishes, walled privacy and excellent security, priced from R995 000.
All this paints a very different picture of the future of the Overberg’s sectional title market from that of the past. Deeds office data shows only two sectional title transfers during 2007 and none during the previous year, while freehold market activity stands at 80 transfers for 2007 and 69 for the year before, along with a 13,2% increase year on year in average sold prices.
Freehold, however, consists mainly of established homes for sale at present. “What is popular are two-and three-bedroomed houses with 1,5 bathrooms, and currently the trend is to buy rather than build, because of the cost of building,” says Van Wyk. “Plots and houses vary tremendously in price across the six towns, starting from R250 000 and going up to R7,5m in some cases.”
Exclusive seafront property is still showing growth of between 18-25% depending on its location. “The interest rate doesn’t affect clients buying in this price range as much,” says van Wyk. “We still believe that the growth percentage for exclusive sea frontage will stay the same.”
In keeping with the national trend the demand for permanent rentals in all the Overberg towns is huge and this makes developments like De Oude Arena in Bredasdorp a good opportunity for investors. Besides, Van Wyk believes capital growth in De Oude Arena will outstrip rental return on the investment.
“In the beach towns you have fewer permanent rentals as house owners tend to let their properties during peak times to receive a higher daily rate,” she says
And it’s not only developments that are growing steadily. The Overberg District’s Local Economic development (LED) initiative, started in 2005 to grow the economy in the area, has identified a number of projects aimed at boosting growth in the region.
“One of the Overberg LED board’s initiatives is the conversion of the Arniston Test Centre - which is the longest runway airport between Arniston and Bredasdorp - into an international airport in time for 2010. This will boost the relatively limited access to the region, as will the current upgrade of Route 319 from Gansbaai through the Garden Route,” says Van Wyk
There are also six golf courses planned for the region and some of the best wine estates in the Western Cape are located there, and the area still remains free of the hustle and bustle of everyday city life.