Golf estates under pressure
Johannesburg - Golf estates in South Africa are without doubt under tremendous pressure – as they are in the rest of the world.
Auction Alliance CEO Rael Levitt has said it will take at least two years for the golf-estate market to recover. In some parts of the country it will take even longer.
South African golf developments, he said, compete in the global environment and are therefore part of the global downturn in these types of developments in places like the United States, Spain and Dubai.
South Africa's golf-estate problems derive not only from the high maintenance costs but, as in Spain, from massive oversupply. For many homeowners struggling to pay their mortgage loans the luxury secondary-housing market is unattractive and unnecessary.
He said, however, golf estates that people occupy on a permanent basis have been unaffected by the global downturn.
They are flourishing and should not be confused with estates that only comprise leisure facilities.
It will take a long time to mop up the oversupply but, when the market recovers, he said golf estates will again demonstrate their former strong growth trend.
One should not lose sight of the fact that many golf estates that seem to be doing well today were also under pressure at one time.
Fancourt, which is currently regarded as an exemplary and successful golf estate, was part of the Masterbond collapse and was saved by German businessmen Hasso Plattner.
Levitt said Auction Alliance has also auctioned other golf estates, such as the Riviera Golf Estate in Vereeniging, for liquidators.
These properties were snapped up by opportunistic investors who saw value in them. The same will happen now. Brave investors will buy the 20 or so golf estates currently under pressure at bargain-basement prices and enjoy their fruits in the medium term.