Lightstone, a provider of comprehensive data, analytics and systems on property, automotive and business assets assesses the trends in beach front home property prices.
One of the advantages of living at the Southern tip of Africa is being surrounded by pristine beaches which span along the 2500 km shore line of South Africa. As each year approaches its end and city dwellers prepare for the annual migration to the beach, a variety of beach names are mentioned. The description of each destination seems to differ from the other with some visitors staying in complexes that look out over the ocean while others prefer a small house at the beach, far away from everyone and everything. But do the property prices of the different beaches vary as much as their look and feel?
“When comparing the price of beach front properties across South Africa, two main measures of value need to be considered namely the average price for a property and the average Rand value per square meter for each holiday destination,” says Paul-Roux de Kock, Analytics Director at Lightstone.
“Distinctions can also be made between freehold properties and sectional title properties because even though the average Rand per square meter value of sectional properties is considerably higher than that of freehold properties, the average property price of free hold properties are significantly higher than that of sectional title properties located in the same area,” adds de Kock.
In order to estimate if beach front property values differ significantly across holiday destinations, Lightstone analysed all properties within a 500 meter proximity from the beach. Of these properties, the province with the highest beach front property value of both freehold and sectional title properties is the Western Cape.
The average beach front freehold property in the Western Cape is on average 51% more expensive at a value of about R2,060,000 when compared to that of R1,360,000 in the Eastern Cape and 32% more expensive than beachfront properties in KwaZulu-Natal valued on average at R1,560,000. The average Rand per square meter value of Western Cape freehold properties is on average 175% larger at R4,400 when compared to R1,800 in the Eastern Cape and R1,600 in KwaZulu-Natal.
The average house price of sectional title beach front properties in the Western Cape is R1,850,000 and about 59% higher than that of sectional title properties in KwaZulu-Natal and 83% higher than that in the Eastern Cape,” says de Kock.
“This variation is apparent not only when analysing the average house price per province but also when analysing the average rand per square meter value. Although beachfront property values differ significantly from province to province, it cannot be assumed that these property values are similar within each province,” explains de Kock.
In order to determine the extent to which beachfront property values differ across different holiday destinations, Lightstone analysed the average house price and average Rand per square meter value of both freehold and sectional title properties in the Western Cape, Eastern Cape and KwaZulu-Natal.
The most expensive freehold beachfront properties in South Africa can be found in Cape Town with an average value of just under R 8,000,000. The second most expensive of these properties can be found in Plettenberg Bay, valued on average at just below R4,200,000 followed by Milnerton valued at R3,100,000. Knysna, Fish Hoek and Simon’s Town’s beach front properties are all valued between R2,000,000 and R3,000,000. The average beach front property prices of the remainder of holiday resorts in the Western Cape are valued below R2,000,000.
De Kock notes, “Interestingly, even though the most expensive of these properties seem to be located in the Western Cape, the average freehold beachfront house price in Ballito and Salt Rock in KwaZulu-Natal is comparable at R2,800,000 and R2,600,000 respectively. The remaining destinations in KwaZulu-Natal and all the destinations in the Eastern Cape have an average house price of below R2,000,000.”
When comparing the average price of beachfront sectional title properties to that of freehold properties in the Western Cape it is apparent that the value of sectional title properties in Cape Town, Millerton and Plettenberg Bay transact at less than half the price of freehold properties in the same town. Beachfront sectional title properties mostly include apartments, flats and chalets sold under a sectional title scheme.
Even though the average house price of sectional title properties in the Western Cape is R1,850,000, the average house price in all other towns except Cape Town are below R2,000,000 with the majority of these towns having an average beachfront house price of between R1,000,000 and R1,600,000. The high average for the Western Cape is heavily influenced by Cape Town, with an average value of R2,500,000 and almost 38% of sectional title beachfront properties in the Western Cape located here.
The average beachfront sectional title property price for the different holiday destinations in the Eastern Cape and KwaZulu-Natal is a little bit lower than that of the Western Cape and range between R670,000 and R1,000,000 with the exception of Salt Rock, Ballito and Umdloti. The average house price of these three destinations is more comparable to average prices observed in the Western Cape at R1,900,000, R1,700,000 and R1,550,000 respectively.
De Kock concludes, “Not only is there a lot of variation in both the average house price of beach front properties and the average Rand per square meter value of beach front properties in the Western Cape, Eastern Cape and KwaZulu-Natal, but there is also a lot of variation in the prices of different beaches in each province”.