Recent media reports that the residential property market in Knysna has turned the corner and is now on a rising trajectory are, by and large, true, although in some cases exaggerated, says Peter Southey, the Rawson Property Group’s franchisee for Knysna.
“In the first quarter of this year,” says Southey, “the number of enquiries rose by about 35% – and our turnover is now 20% up (year-on-year). The longer one lives here the more one is aware that Knysna has the ability to attract buyers from all over South Africa – even from certain coastal areas further east.”
The improvement in sales, says Southey, has been seen in all price brackets, but it is especially evident in the R800,000 to R1,5 million bracket. Below the R800,000 level, he says, most estate agents have only a few entry level apartments to offer.
In this price range, says Southey, Knysna had 32 sales in the first quarter of this year, the average price being R1,090,000.
Demand for more expensive homes, although not quite so strong, was also surprisingly buoyant: in the R1,5 million to R3 million category there were 19 sales in the first quarter at an average price of R2,186,000 and in the R3 million and upwards category there were 13 sales at an average price of R4,860,000.
Thesen Island, says Southey, continued to be the truly glamorous development and, in the first quarter of this year, six of the 13 sales in the top bracket took place here – at prices that rose by some 19% in 2013 but have now eased off by 5%. Also very attractive to some top end buyers are the Pezula Private Estate, the Pezula Golf Estate, Leisure Island and Eastford Country Estates.
In the top brackets, says Southey, there could still be some real bargains to be had because certain buyers are bailing out. In the case of foreign owners, he says, it has sometimes come about because after 10 or 15 years of being ‘swallows’ they are now reaching the age where regular travel is no longer comfortable to them or, in other cases, because financial stresses in Europe have necessitated a cut back. Nevertheless, says Southey, the most significant price appreciations in the year ahead will almost certainly continue to be below R1,5 million.
The increased demand for residential property in Knysna, says Southey, is for the first time in several years causing stock shortages in the lower price range and, as is the case with many other agencies, his staff (four agents in all) are now having to spend more time in canvassing for stock. In the upper brackets, he says, much of the stock is still on the market, but a fair percentage of this remains over-priced.
“A big challenge apart from finding saleable stock,” he says, “is to get bonds, particularly for buyers in the lower brackets. Our high end buyers frequently can and do pay cash, but at the lower end bond applications are usually essential and rejections here can be as high as 40%.”
Southey adds that Knysna had battled through the recession in much the same way as most Cape coastal towns but this long-awaited upturn was anticipated, as the area typically lags 15 months behind the big cities and metropolitan area which started their recoveries some time ago. A big recovery in prices, which, in some areas, have fallen 40 – 50%, is not expected but a continuous slow recovery roughly in line with the rise in inflation, can now be expected.
“It remains a buyer’s market for the time being, but the aspirant purchaser should not wait too long,” he says.