Property is the safest and most lucrative asset in the world. The only asset class included responsible for and included in more than 90% of billionaire investment portfolios.

South African property buyers in the current economic climate are looking for properties that offer them good value for money – more so than ever before. This is according to Linda Erasmus, CEO of Fine & County Sub-Saharan Africa, who says that purchasers who undertake thorough investigation into the micro markets of the areas in which they are interested in buying can find some property investment gems.

In the hustle and bustle of Cape Town, Licensee of the Atlantic Seaboard office, Christopher Hajec says that contrary to what many would think, the suburb which common sense says has the least amount of value for money can, due to pressures in the market, yield the best value for money.

“In South Africa’s luxury property market buyers can currently find the most amazing opportunities for exactly this reason. Savvy investors have known for years that the luxury markets take the highest amount of strain in a downturn and this is where there is often the highest differential between the bull market price and bear market pricing. Add to that a market where the homes can often be secondary, investment or holiday homes and this phenomenon becomes even more pronounced. That is why I would say the best value for money one can find at present is in Camps Bay. Traditionally a luxury market and partially a secondary market, this area has experienced pressure in the current downturn which has resulted in a backlog of available properties and a resulting price softening among those property owners who are serious sellers,” he says.

On the Cape’s South Peninsula, Tony Webb, Licensee of Fine & Country False Bay which covers the coastal towns from Muizenberg, St James, Clovelly, Fish Hoek, Glencairn, and Simon’s Town, says that Fish Hoek and Glencairn offer great value for families as all the relevant level of schools are on the doorstep, from kindergarten to high school. “House prices in these areas tend to be lower than areas that are closer to Cape Town. Equally Simon’s Town and Fish Hoek offer the perfect lifestyle for the retired age group. The upmarket St James and the bohemian Kalk Bay provide excellent value when you compare them to similar coastal properties on the Atlantic Seaboard,” he says.

With today’s modern stress the False Bay suburbs are still close enough to be part of greater Cape Town but far enough away to afford homeowners a level of relaxation. “Wherever you live in the area, you are never more than two kilometres from access to wonderful beaches and a range of amenities,” he says.

Webb notes that there are all kinds of homes available for purchase from one- bedroom apartments to mansions close to the sea and on the mountainside of the coastal towns. “There a number of retirement villages and some gated communities. The area caters for all types of buyers.”

Much further north in Limpopo, Cristelle Stoop, Licensee of Fine & Country Hoedspruit, says that the area is definitely a smart property investment location for anyone looking at good return on investment, as the demand for property ownership continues to grow while available land is getting harder to come by. “Aside from the sound investment value, Hoedspruit offers a lifestyle that you won’t be able to experience anywhere else in the world. There are several wildlife estates in and around the Hoedspruit area, where residents enjoy a wonderfully unique bush lifestyle. “

In Johannesburg, Christelle Rentsch, Licensee of Fine & Country Kempton Park says that homebuyers respond well to Kempton Park as the offerings in property are so diverse. “There is a large range of property available to match all budgets, and Kempton Park is very centrally situated for north and south bound commutes to work. Added to this is the easy access to and convenience of the Gautrain and OR Tambo International Airport – there could hardly be another Gauteng city more convenient for travelling to and for business,” she says. “The average sale price in Kempton Park is just over the R1million mark, but the price range stretches from that of a CBD apartment below R400 000 to the Serengeti and Dunblane upmarket homes hitting the R20 million mark.

“In the northern suburbs of Terenure, Edleen, Birch Acres, Birchleigh and Norkem Park it is easy to find free hold properties below R1million, however, the more popular areas of Glen Marais, Aston Manor and Van Riebeeck Park buyers should be prepared to start their search closer to the R1,5million mark,” she says.

The growth potential of properties in these areas differs, but they all provide buyers with favourable return on investment projections.

On the Cape Atlantic Seaboard, Hajec says that there has been an undeniable realism which has settled in among serious sellers, who at times have adjusted their pricing by as much as 15%-20%. “If you take into account the price paid for the property which has escalated far above the national average over the last 10-15 years, it gives the average serious seller the room to be able to do this. With 200+ properties on the market for sale in Camps Bay and only 43 sales to date this year, it becomes clear that a serious seller is one willing to do, in a depressed market, that which he would not have to do in better times. However, from the perspective of the purchaser willing to invest in this market, that 15%-20% savings can be recovered in short order with adjustments in sentiment in the market,” he says.

From an investment perspective, Camps Bay is an extremely desirable area with sandy beaches, sweeping views of the Atlantic Ocean and excellent restaurants and nightlife. “It is a mainstay in the South African real estate market for upper market luxury buyers and investors alike and many of the buyers from South Africa and abroad have satisfied their dream of a beachside lifestyle in this well known destination spot,” says Hajec. “Prices range from an apartment starting from around R4,5million up to around R8,5million on average while homes range between R12,5million and R17,5million and upwards to R90million plus. But there are many deals to be had in those ranges and even below for the savvy buyer who takes the time to look through and find the serious sellers within those various options.”

Growth potential in the False Bay region is generally favourable, with property historically experiencing excellent growth without severe price swings, according to Webb. “There is very little land left for development and the towns and suburbs are mostly well established. The market fluctuations tend not to be as wide as other areas of urban Cape Town or other metropolitan areas. When the market is in recession the price adjustment tends to be lower and when the market is buoyant the house price increase seems more manageable.”

Webb says that a small, one-bedroom apartment may cost as little as R700 000, while most freehold properties will be in the R2million – R3,5million, although some mountainside homes can sell for as much as R10million or more. “The exclusive St James on the other hand will have properties in the R25million range and above. These would be exceptional homes but buyers looking for the three-bedroom family home with sea view should be able to find the perfect home with a price tag between R3million and R4million.”

While Webb says that the False Bay area caters to a wide range of buyers, they are predominantly younger families and retired or close to retired. “Some buyers still work in Gauteng and are looking for somewhere they would like to retire, and there are the overseas buyers, also recently retired who would like to spend their summers in a warmer climate. There is also a group of buyers currently living in the Cape Town suburbs who, on retirement, buy for the lifestyle offered in the area,” he says.

In the greater Hoedspruit area, Stoop says that a selection of freehold, sectional title, and shareblock options are available as well as vacant land within 15 residential different estates in and around Hoedspruit. This is in addition to game farms, game lodges, agricultural land and businesses that Fine & Country Hoedspruit also market.

“Should a buyer want to build their own dream home, there are vacant stands available from R300 000 to R1,2million, dependent in which estate the stand is located in, and whether or not there are any special features such as mountain views or dry riverbed access from the stand. Sectional title homes range between R430 000 and R1,4million. The lower-end units are conveniently located in town, but don’t provide the true wildlife lifestyle, whereas the upper-end homes are situated on a wildlife estate, offering security and the wildlife lifestyle. Freehold homes start at around R1,4million and can be priced as high as R7million. The distinguishing factors between these homes all come down to the estates they are located in, the lifestyle they provide, and the design and finishes of the homes,” says Stoop.

Buyers in the Hoedspruit region are typically foreign investors who purchase holiday homes, and who have seen the rental income potential during times when they are not in residence, as well as families who are trading the rush and the pressure of city living for the relaxed and safe bushveld environment of Hoedspruit.

Buyers in Kempton Park, according to Rentsch, are mainly looking for family homes. “When we search for the ideal home for our buyers we take similar affordability and offering into account for areas like Birchleigh, Norkem Park and Terenure. Is it also noticeable that this market belongs predominately to the young adult under 35yrs of age. Glen Marais, Aston Manor and Van Riebeeck Park offer similar property profiles based not only on value, but also because these areas have so many enclosed, or gated communities to offer. For buyers who will compromise on the size of the stands in exchange for higher security, Blue Gill, Glen Erasmia and Glen Eagles are popular choices. This market – as well as the luxury estates of Serengeti Golf and Wildlife Estate and Dunblane Lifestyle and Equestrian Estate – is dominated by the middle aged buyer between ages of 36 and 49 years.”

Erasmus concludes by saying that these snapshots into various areas across the county show that buyer can find some sound property purchases that offer good value for money and long-term growth potential.

Empire Wealth

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