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Thursday Nov 11, 2021

It might be difficult to buy property in the Garden Route right now

The trend of semigration and lure of a better quality of life is causing stock shortages

Our 'new normal' is increasingly being characterised by an ability to work from anywhere, with many businesses decentralising and even selling or sub-leasing some of their office space. Those who can, seem to be in pursuit of a better work-life balance and have opted to relocate their families out of cities to places that are more conducive to this new hybrid work phenomenon. 

Because of this trend, it might be difficult to buy property in the Garden Route right now, as the lure of a better quality of life is causing stock shortages, says Antonie Goosen, principal and founder of Meridian Realty. 

Goosen says data from analytics group Lightstone properties shows semigration, referring to people relocating within South Africa, has been gaining traction, with the number of home owners relocating between 2018 and 2020 totalling 84,000. The data shows that of the 84,000, 76% moved from city to city, 14% relocated from a city to a smaller town and 10% moving from smaller towns to the city. So, the majority are moving from city to city and this can clearly be seen by those leaving Gauteng to move to places like Cape Town and Durban, for example. 

Goosen says the Lightstone data also shows that movements from city to city have been declining over the same period, from 22,919 in 2018 to 21,861 in 2019 to 19,005 in 2020.  "The data shows that almost 12,000 homeowners left cities for smaller towns over the same three year period. This may seem insignificant when thinking about the exodus from a big city, but this influx into towns is significant and will impact property stock, prices and availability as we are now seeing in the Garden Route and particularly George," says Goosen. 

The garden route stretches 300km from Witsand in the Western Cape to Tsitsikamma Storms River in the Eastern Cape and is probably best known for its unique fauna and flora, stretches of beach, forests, wine farms, outdoor biking and hiking trails, wildlife and general beauty. Positioned along the Garden Route and surrounded by the Outeniqua Mountains, George is just over 400km from Cape Town and just over 300km from Port Elizabeth.

"Considered to be the administrative capital of the Southern Cape, George boasts state of the art infrastructure and a well-functioning municipality. Pair this with the ability to work from home and George all of a sudden seems like a beautiful, connected, safe and well-functioning place to live and work.

"According to Property24's annual sale and listing trends, 2020 saw 1679 sales in George, at an average asking price of R1 855 000, and an average sales price of R1 266 800. Compare this to the 2021 to date statistics (as at 19 Oct 2021), of 1965 sales year to date, with a good two months of the year left.  According to Property24's data the average asking price in George in 2021 to date has been R1 970 000, and the average selling price achieved has been R1 500 000.  That amounts to an increase of 17,03% in volume of sale from 2020, with a substantial part of the year still left. Meridian Realty has seen a similar trend play out in sales numbers in and around the Garden Route.  The company's sales volumes have increased 39,18% from 2020 to 2021 year to date (1 Jan 2021 to 19 Oct 2021) in the area," says Goosen.

According to Bert and Lynette White, Meridian Estate Agents based in George and working along the Garden Route, one in five of their buyers are currently moving to George as they are able to work from home. They also note that the majority of their buyers looking to permanently reside in George are from Gauteng, with an increasing number from Mpumalanga over the past three years, an increase in buyers from the Free State in the last two years and they are now seeing buyers from Cape Town rising in numbers too. According to Bert, "George is epitomised by a culture of trust and community and this is something that buyers are looking for, a small town culture, a low crime rate and service delivery."

Another interesting trend is a growing shortage of properties on the market.  According to Property24 listing stats, there has been a decline of 22.86% year on year in the number of properties on the market. The Whites confirm this and say that buyers are looking to buy free standing homes as well as homes within estates and stock levels in all typed of homes is running low, causing property prices in George and the surrounds to rise.

Goosen says there are, however, new developments on the cards, in Kingswood, Eden Residential Estate, Blue Mountain, 1 on York Lifestyle Village and the greater George area. However, the lag in availability is still causing prices to continue to increase in the short term. "The move to smaller, better functioning towns aligns perfectly with the motivation behind semigration. This trend can only benefit smaller towns in terms of an influx of continuous income as opposed to spending by seasonal holiday makers. The increase in demand for property and resultant lack of stock has already shown the knock-on effect of increasing property prices. This trend is predicted to continue to play out along the garden route as people continue to seek out a better life for themselves and their families," concludes Goosen.

    
 

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