The residential market on the West Coast is booming, fueled by a combination of economic growth around the Vredenburg-Saldanha hub and increased buyer appetite according to Pierre Germishuys, managing director for Seeff’s operations in the area.
“The villages of Langebaan and Yzerfontein in particular has picked up a notable chunk of the growth with sales and prices up over the past two years”, he says. Excellent activity during the first half of this year has also set the pace for a positive 2016.
“Buyers are still looking and for sellers, it is still a good time to be in the market”, he says.
The demand is coming from a constant stream of people from other provinces, some heading here for economic reasons to take up part time or permanent employment in the new growth industries while others are part of the great migration to the Cape.
There has also been an upsurge in older buyers with fifty-plussers comprising about half of sales over the last year.
“Aside from boosting residential sales, we have seen a rental market explosion, especially around the Vredenburg-Saldanha-Langebaan area”, says Germishuys.
Langebaan is now a popular commuter town for those working in the Vredenburg-Saldanha hub and its 7800 permanent resident population is still growing.
A study of the Lighstone data for the past two years shows that sellers have benefited greatly with sales turnover and prices up at rates well-above the national averages”, says Germishuys.
In 2013 for example, sales in Langebaan amounted to 410 freehold properties sold to the value of R422m. By 2014, this had picked up by 18% in value terms and 43% in unit terms and last year, by a further 26% in value and 7% in volume.
Although Langebaan still boasts an average sales price of about R1.184m, a significant number of R2m-plus sales have been concluded, mostly over the last year.
“At the Langebaan Country Estate (a golf estate) alone, some ten properties have sold, ranging from R2.2m to R3.4m and R3.7m; quite significant and a good indication of future growth”, says Jaco Coetzee, a Seeff agent in the town.
Within the town itself, Middedorp has seen seven sales, ranging from R2m to R3.96m in Oester Street and recently, as much as R5.05m in Spierdijk Close.
At Myburgh Park too, at least six sales have topped the R2m price mark ranging to R3.6m in Babiana Street, R4.5m in Cormorant Close and recently, R5.8m in the same street.
“Meanwhile”, says Merle Nicholls, “also a Seeff agent in the town, about 8 sales were concluded at the Calypso Beach estate, ranging from R2m to R4m and two sales at a highest price of R5.85m each. There were also two sales at Paradise Beach of R2.4m and R2.965m each, a R2.5m sale in Mykonos and sales of R2.285m and R2.5m at Sunset Estate”.
“The West Coast is no longer sleepy”, says Nicholls.“It is all happening in this part of the Cape that now boasts excellent shopping malls and there is even a Curro Private School in the area”.
“We no longer have to travel all the way to the city, but have almost everything we need right on hand, from clothing and restaurant brands to the two best beach restaurants, Strandloper and Strandkombuis”.
“There is still high demand almost across the board in the sub-R3m price range as well as for more affordable properties around the R1m range in Kalivas (Club Mykonos) and Sunset Heights. These are especially popular as buy-to-let investments”, she adds.
Anything priced to about R1.7m to R2m can sell within a month and Coetzee says that even the new Blue Lagoon development is practically sold out.
“Our outlook remains positive, especially if the reported 5000-6000 new jobs to be created by the IDZ in Saldanha comes to fruition. And, it is not just sales, but the rental market that is set to continue booming. For investors too, the market offers excellent opportunities, especially in the buy-to-let sector”.
There has been good growth in the rental rates says the agent, citing the example of an 180sqm home in the new Blue Lagoon that achieved a rental rate of R6.000 per month late last year. It now rents out for as much as R10.000 per month, thus equating to growth of 67% in under a year.
Marelize Huysamen, another Seeff agent, says that there are now very few bargains and hardly any distressed sales in Langebaan.
“While there are plenty of properties on the market, many are overpriced and there is actually a shortage of good sellable stock. The tendency for unscrupulous estate agents to overprice properties so that they get the mandates is a draw-back for the market”, she adds.
“Neighbouring Yzerfontein meanwhile may rank as one of the smallest towns and markets on the West Coast with just 1300 permanent residents, but it boasts a higher average sales price of R1.43m”, says Germishuys.
Activity for the 2013 year amounted to 174 freehold property sales worth R172m. By last year, the value of sales had risen by 28% and the number of units sold by 13%.
Area specialist, Michelle Livingstone-Louw, says that R2.2m seems to the ceiling in terms of what buyers are looking for. While there are plenty of overpriced properties on the market, there is a shortage of sellable properties below the R1.8m price mark, she adds.
“We are also seeing a bit of speculative selling. A home sold by the agent about four months ago for R1.35m is for example back on the market, but now at a price of R1.9m”.
“The challenge for sellers that are aiming too high, is that buyers have access to the internet and understand what is going on the market. They are now too smart to overpay”, says the agent.
“Both Langebaan and Yzerfontein have seen excellent growth over the last ten years with commercial and infrastructure development along with more residential properties including excellent estates and beach complexes along with stunning beach villas that can even compare with Clifton and Camps Bay”, says Livingstone-Louw.
“The close proximity to Cape Town is a big plus factor. Most buyers cite the good facilities, laid-back lifestyle and stunning, largely unspoilt surrounds as key to their buying decision”, she adds.
Germishuys says the hard work and dedication of agents in the villages are yielding dividends.
“We now have nine offices that cover the area that stretches from Jakkalsfontein to Lamberts Bay and, almost all of our offices report buoyant activity in both the sales and rental markets, even for the first part of this year, our activity is already about 80% better than two years ago”.