Migration to the Western Cape has by far surpassed movement to other provinces in recent years, which is clearly evidenced by Lightstone figures that show that last year, 6406 households from other regions bought property in the province, more than three times as many as the next highest of 1971 in Gauteng.
And it’s not only Cape Town that buyers have set their sights on; the permanent populations in coastal towns have swelled since 2021, with Mossel Bay in the Garden Route topping the list of SA towns that had the highest influx of residents last year.
According to Peter Máre, Lew Geffen Sotheby’s International Principal in Mossel Bay and Still Bay, although the market has stabilised after the 2021/22 post-pandemic rush, semigration is still a significant driver in the area and last year transactions were still well ahead of the pre-pandemic period.
“In 2021 the average three-bedroom family home with a double garage was priced around R1.8 million and, although the market peaked in 2022 with a record high of 1160 property registrations, demand has remained strong and property values have continued to grow.
“Although there are still a few fixer-upper gems available for under R2m, they are becoming very scarce and freehold homes with three or more bedrooms are now priced between R2.5m and R3.8m, depending on size and location. And at the top end of the market, there is now a wide choice of properties in the R5m to R10m price band as well as stunning homes in the R10m plus price band.”
Máre says that the town has become popular with upcountry buyers not only for its wonderful lifestyle and close proximity to George and the airport but also because it still offers more accessible pricing that many of the neighbouring seaside towns and, thereby an excellent investment opportunity.
“Additionally, and very importantly, Mossel Bay is one of the best-run municipalities in the country and in 2021 the independent rating agency Ratings Afrika named it South Africa’s most financially sustainable municipality.”
In Plettenberg Bay, the market has also levelled off with winter once again being a relatively slow period after three uncharacteristically busy seasons, but stock levels remain low and there is still a strong demand for correctly priced properties.
However, despite the slowdown, property values in the town unexpectedly increased dramatically again last year, with preliminary figures indicating an average increase of around 24%, according to Steve Neufeld, Manager Principal for Lew Geffen Sotheby’s International Realty in Plettenberg Bay.
“The average value for a property in Plett first spiked in 2021 when it rose by 24% to R3m with a further 9% gain to R3.3m in 2022 and again by 24% in 2023 to R4.1m, which is a massive increase in value in just four years.
“Entry level asking prices in Plett have also increased considerably over the past four years and it’s now difficult to find full title homes below R3.5m and sectional title unit prices start at R1.5m, although apartments as well as vacant land are in very short supply.
“There are a few residential developments in the pipeline, however, the town’s projected growth is beyond the projected increase in supply, and there is already a dire shortage of affordable housing.”
Neufeld adds that the top current publicised asking prices for residential properties on the market are: R58m for a house in The Tides, R57m for a house on Look Out Beach, R27.5million for a large tract of vacant land with development potential in the Cutty Sarke area, and R13,95m for a penthouse apartment in town.
Knysna property prices have seen tremendous growth in recent years with a sharp increase in the median house price since 2021, jumping from R2m to R3m in 2022, then increasing to R3.45m in 2023 before reaching a record high of R3.51 this year.
And with 41% of the current owners having owned their properties for seven years or less and 44% of recent buyers aged over 50, Knysna has clearly become a popular choice with empty nesters and retirees looking for a slower pace of life as they enter their golden years.
Although not strictly on the Garden Route, Hermanus is also currently one of the top semigration destinations and has one of the fastest-growing markets in the country, with property values continuously increasing year on year.
“We first started to see renewed activity at the beginning of 2021 when people were starting to adjust to the new normal and plan ahead, and there has been a steady and notable upswing since then,” says Brett Sparg, Managing Director for Lew Geffen Sotheby’s International Realty in Hermanus
“In 2022, the median house price reached a record high of R2.51m and last year the median sectional title price reached a record median price of R1.85m.
“The upper end of the market is also faring well and during the past 12 months ending 30 June, 72 freehold properties priced above R3m changed hands at an average price of R6.09m with 14 of those sales being during the last three months of that period at an average price of R7.07m.”
Sparg adds that if current demand is ongoing, values are set to steadily increase: “Hermanus has significant geographical and environmental constraints, so new development and further physical expansion are unfortunately rather limited.”
The impact of semigration on the Western Cape’s property market is clearly evidenced by Lightstone’s latest report on average property values with nine out of the top ten suburbs now being in the Western Cape and just Blair Atholl in Gauteng being the outlier.
And, with the provinces record of good governance as well as their management of loadshedding, the additional hydro-electric power supply and investment into the area, semigration is likely to be ongoing – at least for the foreseeable future.
