Vacation property: deals clinched later
Johannesburg – Most property sales in South Africa’s coastal towns take place during the first quarter after the holiday period.
These means that some holiday makers are on the lookout for the proverbial seaside home during the holidays, but conclude the deal only later.
This has emerged from research conducted by Lightstone, which focuses on coastal property sales in nine of the country’s prime holiday destinations.
These destinations are Langebaan and Hermanus in the Western Cape, Mossel Bay in the southern Cape, St Francis Bay, Port Alfred and Jeffrey’s Bay in the Eastern Cape and Ballito, Umhlanga and Richards bay on the north coast of KwaZulu-Natal.
During the first quarters of 2010 and 2011 the number of sales in these areas was proportionately higher than in subsequent quarters.
In January 2010 these sales made up around 11% of total sales and in January 2011 just under 10%.
In February 2010 these sales made up 10% and in February 2011 just over 11%.
In March 2011 the figure was 11%.
Of all sales in the areas 31% took place in the first quarter of 2011, 28% in the second quarter, 24% in the third quarter and 17% in the fourth.
Lightstone said the country’s top coastal area in terms of price appreciation is Kenton-on-Sea in the Eastern Cape.
The average property value in this town rose 50% in 2011 to R1.5m – from R1m in 2010.
Lightstone property analyst Hayley Ivins said the town’s popularity as a holiday destination is probably a strong factor in the property growth of the area.
The 1 000 or so permanent residents see twice as many visitors in the December holiday period, she said.
Michael Wilmot, regional manager for Pam Golding Properties (PGE), said serious buyers are staring to return to the holiday market and there is particular interest in older homes offering good value.
He said buyers come mostly from Gauteng, other parts of the Eastern Cape and Bloemfontein.
They are generally on the lookout for properties ranging in price from R1m to R2.5m.
He said the more expensive side of the market, where sales have been muted during the past two years, is also seeing a revival.
“Prospective buyers are showing interest in the R4m to R6m price category.”
According to the First National Bank (FNB) property barometer, purchases of holiday homes showed a modest improvement in 2011.
During that year these purchases represented 2.5% of all purchases, compared with 1.5% in 2010.
FNB property analyst John Loos said in the current economic environment the focus is still on buying primary properties, which means areas with a large proportion of primary homes will perform better than the holiday markets.
In 2011 the FNB holiday home price index reflected a 6.2% decline year-on-year, compared with a 4.9% increase in the major metropolitan areas.