View of Tre Donne Estate in Somerset West, where average house prices are around R3 million to R3.5 million.
Homes situated within estates are selling faster than any other residential property in the Cape Winelands areas of Stellenbosch and Somerset West, says Louise Varga, area manager for Pam Golding Properties.
“It’s not really surprising that both sectional title and freehold properties within secure lifestyle estates are being snapped up far sooner than their free standing counterparts in the suburbs. This is despite the fact that most buyers ‘buy up’ when relocating to estate, while existing homeowners may often upgrade to a larger home within the same estate.”
She says apart from generally achieving higher capital growth at a faster rate, homes within popular estates can yield higher rental income, ranging from R20 000 to R45 000 per month, which is of particular relevance for buy to let investors.
“For good reason we’ve seen rapid sell-outs at a number of estates. Close to town in Stellenbosch, at Brandwacht Aan Rivier, comprising 120 erven, we already had a waiting list of 260 potential buyers when the development was launched, resulting in an immediate sell-out of the entire estate. Building activity has been incredible in the five years since launch date and this estate is already reaching maturity.”
Indicative of the sustained high demand which is driving up prices of properties in prestigious, well-positioned estates, at the 300ha De Zalze Winelands Golf Estate on the banks of the Blaauwklippen River, Pam Golding Properties sold all 350 erven in four phases, with the price rising for each subsequent phase.
Says Varga: “As an example, a vacant plot of 1 000sqm which sold for R1.1 million in 2005 fetched approximately R4.5 million in 2008 and R6 million in 2010. This was despite the fact that the last purchaser had to pay R22 000 per month penalty until he built and received the occupation certificate from the council. Such is the high demand for this prime residential estate.”
Homes in De Zalze have been achieving excellent capital growth in recent years. Five years ago entry level prices started at around R4 million to R5 million, while currently at entry level there is only one house available, priced at R6.2 million. Prices of homes then jump to R11.9 million for a sale just concluded by Pam Golding Properties, and range up to R32 million.
“In nearby Somerset West estate homes in the R1.4 million to R3.5 million price bracket should sell within two to four weeks, while by comparison, free standing homes not within estates would take around four to eight weeks or longer to sell. If priced competitively with similar homes that are available an estate property can sell in days”.
“Our statistics show that in the last 12 months, in the R2 million price range 37 percent (165) of all transfers (450) were in estates. In the R4.5 million price bracket 59 percent (116) of a total of 196 transfers took place in estates which reveals that the higher priced estates are more popular than freehold properties outside estates.”
La Piazza, a development comprising 10 homes in Parel Vallei in Somerset West, priced at R1.8 million each, sold out very quickly in 2005 and would now transfer at around R3.3 million if they came into the market. Consisting of 62 properties, Meerhof Estate also sold out rapidly and developed into an attractive upmarket estate, with plots of 600sqm and homes of 240-320sqm and scenic sea views. Having originally sold in 2010 for prices around R2.2 million, asking prices are now over R4 million.
Unlike Stellenbosch, which is landlocked with no spare land for development and a rezoning process for agricultural land taking up to 15 years or more, Somerset West still has tracts of land which can be developed on either side of the town – both east and west.
“There is also good value for money to be had in Somerset West,” says Varga. “Many of our buyers are families with pets, who are sometimes restricted when purchasing in estates because of the pet rules. However we have two lovely estates – Tre Donne and High Riding, located 7km outside the town to the east where plots of 3000sqm to one hectare attract families who wish to keep horses, grow a few small scale crops and generally enjoy the generous open space. These estates are gaining in popularity as prices are now averaging at R3.5 million which represents excellent value, especially considering the quality of the homes and lifestyle. The views are scenic and the homes new (four to five years old) with different and interesting designs and architecture.”
She says properties generally in Somerset West have doubled in price in 10 years. More security estates are being built to cater for the high demand, fetching prices between R6 million and R12 million at the top end typically for plots of about 1000sqm and dwellings of 450sqm. Outside the estates in the suburbs, the larger free standing homes which are older with mature, treed gardens but dwellings that need upgrading, are selling for lower prices around R4 million to R5 million for plots of 2 500sqm and homes of 450sqm.
“The security estates in Somerset West tend to have smaller plots than the free standing properties in general, so although the initial price of the home is higher, the maintenance and running costs are lower, which is an attraction. Comparable homes in the same suburb would also probably see a 20 to 30 percent difference between estate and free standing rentals, with the former achieving the higher yield.”
So exactly what is it that is attracting an increasing number of home buyers to estates?
Varga says both the demand for estate living and estate property price growth is determined and fuelled by a number of factors such as proximity to major business centres and schools, security, quality lifestyle attractions such as leisure and sports activities and aesthetic appeal, quality and design of houses and resale potential. A further drawcard is the fact that the sizeable monthly costs for water, electricity and garden maintenance incurred for large, freestanding properties are replaced by shared costs and hassle-free estate management.
“Quality of build and design is not to be underestimated on the priority list for home buyers. As estate living became high in demand particularly during the past decade, homes in estates are generally newer and more modern, with contemporary designs and finishes and increasingly, with the latest technology and ‘green’ energy saving features.”
Adds Annien Borg, MD for Pam Golding Properties in the Boland and Overberg regions: “The trend among home buyers towards acquiring homes on secure, lifestyle estates is driven by a number of factors, of which security is but one. The reasons for the purchase of property in these estates are many and varied – they afford a sense of community in a secure environment where their children can play in the street and where families have peace of mind, especially in instances where the major breadwinner often commutes out of town on business. These estates tend to be conveniently well positioned within easy reach of centres or hubs and good schooling, presenting further key draw cards for home buyers, and they also often include a number of leisure facilities and sport amenities. Some even have private schools, gyms and shopping complexes inside the estate. This is coupled with the fact that homeowners can enjoy spacious, park-like open surrounds within the security of the estate, while care of these grounds and many maintenance issues are taken care of by the estate management.”
Adds Varga: “The Boland is a prime choice for many home buyers – including a large number of Gauteng home seekers, with its scenic settings surrounded by Wineland farms with heritage Cape Dutch homesteads, rolling vineyards and spectacular mountain views. It’s the best of both worlds – healthy living in the countryside with open space, fresh air and ample outdoor activities, but still within close proximity of all amenities and excellent schools, both English and Afrikaans.”
Buyers of estate property also seem to be moving towards a younger generation, many young couples or with small children. In Somerset West Pam Golding Properties notes about 18 percent of estate buyers are between 18 and 35 years. At the other end of the scale more mature buyers are moving from large family homes into more compact, manageable properties in estates.
“In Stellenbosch many estate buyers are locals who relocate from free standing homes. Some of the younger buyers move from their rental or starter home or apartment elsewhere in the town to build their dream home in an estate. We also see a migration of buyers from the northern provinces,” says Varga.
“A home on an estate does come at a price. In De Zalze Golf Estate there is hardly any stock available in the price range below R10 million, which is the higher to top end of the residential market in Stellenbosch.”
Says Lizette Botha, Pam Golding Properties agent in Stellenbosch: “In Digteby Estate, where we see a large percentage of younger buyers, the last four properties which were recently sold achieved prices between R4.15 million and R5.05 million for a comfortable family home. An older family home in a suburban area in the town would achieve an average price of R3 million to R3.8 million.”
“Somerset West also has estates in good areas where one can acquire a home from R1.6 million upwards,” adds Pam Golding Properties agent Gail Gould. “ At the higher end of the market at the 51ha Boskloof Eco Estate, 100 homes – all with magnificent views, can be purchased from R5 million.”