Hermanus residential market making a strong comeback

Current Lightstone data, ongoing development, and shortages in the rental sector are all a clear indication of Hermanus’s robust market rebound this year with agents reporting keen interest, especially from buyers looking to move to the area from upcountry.

“We first started to see renewed activity at the beginning of 2021 when people were beginning to adjust to the new normal, but there has been a notable upswing during the last few months,” says Brett Sparg, Managing Director for Lew Geffen Sotheby’s International Realty in Hermanus.

He adds that although the Hermanus market is historically seasonal by nature and considerably slower during the winter months, the market has already reached 80% of the total sales volume achieved in 2020 with the busier spring/summer season only just beginning.

This market shift is clearly evidenced by Lightstone which reveals that by the end of July there had already been 481 freehold registrations in the popular seaside town compared to 427 in 2020 and the median price has also risen, from R1.9 million last year, to R2.1m by end-July 2021.

Sparg largely attributes the increased activity to a spike in semigration as a result of the growing prevalence of remote working as well as the unfortunate riots in Gauteng and KwaZulu Natal earlier this year.

“The heart-breaking incidences of violence upcountry have driven people to want to move to areas they consider to be safer and Hermanus is not only perceived to be a safe town, it also has good schools and a well-run municipality.

“We are fielding enquiries from a growing number of young professionals seeking a different quality of life for their families which is corroborated by sales data showing that almost half the recent sellers during the past year were aged 65 and older whilst 46% of new buyers are 49 years or younger.

“We’ve also seen a lot of people move here from Cape Town during the past year, especially those who can work remotely but do need to be in close enough proximity to the city to be able to go through as and when required.”

Hermanus has followed the national trend where the lower interest rate environment has stimulated first-time buyer sales in the R1.5m to R 2.5m price band and, as a result, the highest level of activity is being seen in suburbs like Sandbaai and Northcliff.

However, according to Sparg, Voelklip, Kwaaiwater, Eastcliff, Westcliff and Hermanus Heights also continue to be popular choices and secure developments are always high in demand.

The influx of semigrants has not only boosted sales in the area, but also the rental market with stock shortages now being seen in the long-term rental sector.

“There has been a notable uptick in enquiries for long term rentals from people who are moving to the area but who want to live here for a while and understand the market a bit better before committing to buying property,” says Sparg.

“The rental market has been further impacted by the fact that, with Covid, a lot more owners have been utilising their second home more often, so their incentive has been to short term rent rather than having the security of a long-term tenant.”

Sparg believes that the resultant stock shortage has created an excellent window of opportunity for investment purchasers looking for a secure investment with solid returns.

“Investors looking to enter the rental market should consider the new developments in the Sandbaai area which offer secure, brand new and well-priced homes in an area that is close to the new Curro school and the Whale Coast Mall.

“At the higher end of the market, the Fernkloof Golf Estate continues to be very desirable and attracts a lot of interest, with the common theme being that buyers are seeking the benefits of secure estate-style living.”

Sparg believes that the scenic town will continue to grow in popularity as it offers a host of drawcards that appeal to a wide demographic.

“Hermanus is of the size where it offers enough infrastructure and options to meet most people’s needs whilst retaining its seaside town charm.

“The local municipality is generally well run, we have sophisticated medical infrastructure, very good schools, a low crime rate in a South African context and the town is fairly close to Cape Town and an international airport and when you combine this with an incredible lifestyle offering, it becomes a very attractive destination.

“We have mountain trails and the Atlantic Ocean for the outdoor enthusiasts, beautiful beaches, numerous high-quality restaurants, coffee shops and cafés and proximity to incredible wine farms, it really is a special place to live.”