The latest FNB property barometer reveals that during the first quarter of 2016, the Western Cape house price index rose 12% year-on-year, compared to the Eastern Cape, which increased by 7.6%, KwaZulu-Natal by 5.6% and Gauteng by 3%. This increase can be attributed to the rising demand for property in the Western Cape, driven by the increasing rate of semigration among upcountry buyers.
This is according to Jan Minnie, Sales Director of Somerset Lakes, an adventure lifestyle estate, who explains that ‘semigrating’ is one of the latest trends in the South African property market, and that Cape Town has become the ideal semigration destination due to its proximity to the coast and laid-back atmosphere. He says that as this trend unfolds, local property agents are seeing a boost in buying activity from upcountry buyers in the Somerset West area.
“Somerset West has become the top residential purchasing area in the Helderberg property market in terms of demand and average prices, especially among out-of-town buyers, who currently comprise about 40% of the potential buyers expressing interest in the area. The buyer demographic continues to change as we see an increased number of prospective purchasers from Durban, Pretoria, Gauteng, Mpumalanga and Bloemfontein.”
Minnie says that the winelands lifestyle is extremely appealing to upcountry buyers as it offers the best of both worlds. “The area is close enough to Cape Town city centre for professionals and offers residents’ country living with all necessary amenities right on your doorstep. Somerset West has become extremely sought-after amongst those looking to retire near the coast, as well as for families looking to raise their children in a safe area with good schools close by.”
As safety is one of the biggest priorities when choosing where to live, many prospective buyers in the area are looking for property within an estate which offers tight security, says Minnie. “These days most gated communities have intense security systems in place, including 24-hour patrols and guardhouses, high-definition surveillance cameras which are monitored around the clock and electrified and alarmed perimeter fencing with anti-dig foundations”.
“Another factor attracting buyers to these gated estates in the area is the lifestyle aspect. Buyers are drawn in by the many recreational aspects offered in a lifestyle estate such as gym facilities, communal pools, sporting activities and even club houses that individuals would not have access to if they had not purchased within the estate. As the demand for property in gated communities continues to rise, we see a steady increase in property values with these estates.”
According to the latest FNB figures housing estates currently make up over 15% of all property in the country – a significant proportion that has seen strong growth in recent years. “What’s more, the value of these estate properties is equal to the total value of all property in the Johannesburg region”.
“These FNB figures also indicated that the average house price in South Africa (R700 000) is 30% lower than the average house price within an estate (R1 million), we can see where the above average buyer is choosing to purchase property. With such an increasing demand, property values continue to rise. Investors in Somerset West have sold one bedroom units in the area for R900k after paying R600k a year ago. Two bedroom units at Somerset Lakes are selling for 23% higher prices than they sold for 15 months ago and three bedroom units are selling at 25% more.”
Minnie says that he believes Somerset West will continue to flourish as new estates cultivate this growing trend. “New schools and lifestyle estates such as Somerset Lakes, which includes a New Reddam School, cycling and running tracks, outdoor gym stations, BMX Pump Track and adventure trails, have become an essential part of the area’s growth and buyers will continue to see new and innovative development,” he concludes.