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Demand for coastal homes picking up

Cape Town - Negatively impacted by the recession, the coastal residential property market, in particular the leisure market, has battled to regain momentum in the prevailing challenging economic trading conditions.

This summer however, and in particular during the past holiday season, interest and activity in the coastal residential market has picked up among holiday and retirement buyers, reported Pam Golding Properties (PGP).

In KwaZulu-Natal, Carol Reynolds, PGP area principal in Durban, Durban North and La Lucia said the Durban beachfront, which attracts both holiday and investment buyers, has seen an increase in enquiries since the middle of 2013.

“The Durban beachfront is popular as it offers entry level investment opportunities from as low as R300 000. The buy-to-let proposition is therefore very attractive to investors, because return on investment is higher than most areas, given the initial acquisition cost," she said.

"At this level, there are no transfer duties. In addition, the Point area is gaining momentum with two and three bedroom apartments the most sought after, with prices ranging from R1.5m upwards.

In Durban North and La Lucia we are also seeing relocations from Johannesburg, with many families choosing to settle at the coast, with the major breadwinner commuting to Johannesburg every week for work.

On the KwaZulu-Natal South Coast in the Margate area, PGP's Margate office said, while traditionally enquiries increase over the holiday season, there has been a major shift in trends regarding enquiries - from sectional title to full title properties.

Enquiries have also been in the upper end of the market from investors not requiring large bonds.

Generally they are Gauteng and KZN buyers seeking a home away from home which ultimately is a long term investment.

In Port Edward, the local PGP office reported that enquiries and actual sales have definitely picked up in recent months.

The Trafalgar area is popular among upcountry visitors from Gauteng, Limpopo and Mpumalanga as well as Eastern Cape buyers.

Eastern Cape

In Port Elizabeth PGP’s area principal Ian Olivier said interest in coastal property definitely increased this summer, particularly homes with a sea view and generally priced up to around R2m.

“You can even buy a front line home for under R3m. We recently sold a two bedroom home, built in the 1950s, for R1.7m which the new owner then demolished in order to build a beautiful modern home," he said.

Buyers comprise mainly local buyers seeking primary homes, as well as those from upcountry and Western Cape relocating on business or for a better lifestyle, and investors seeking a home to retire to in the future.

Increasingly, there are overseas buyers - from Germany, the US and even the Philippines - looking for leisure property.

Mossel Bay

The Mossel Bay office of PGP saw a huge increase in enquiries in the six months culminating in the recent festive season with a revival in the market for vacant stands, and with enquiries exceeding previous summer season.

Purchasers are mainly acquiring leisure homes or properties for future retirement on the coast, with the majority from Gauteng and some from Cape Town and the central provinces.

In the Western Cape coastal towns of Witsand and Stilbaai, along the area known as the Blombos coast, PGP has been seeing heightened interest among upcountry buyers, including Gauteng and Limpopo.

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