Whilst many estates and areas are experiencing a drastic slow down in price growth, Droeks Malan, Seeff’s agent for the Welgevonden Estate in Stellenbosch says that the average selling price for the estate has spiked to a record high of 14.9% year-on-year on top of the 7.5% growth clocked up in 2015.
Droeks says that the estate has seen a massive influx of new buyers from Gauteng and KZN looking for security and an affordable home in the winelands. A recent security upgrade has further enhanced the desirability of the estate.
“The estate ticks so many boxes for buyers that it probably should come as no surprise that property here has continued to perform so well”, he adds. “Aside from a picturesque location and stunning mountain and vineyard views, residents enjoy a healthy outdoor lifestyle with access to parks and play areas, walking trails and dams and shopping facilities”.
“During the post 2007/8 recession period, prices rose by only 4%-7% on average yearly and despite a slower economy, we are seeing prices here just continuing to rise. This puts the estate amongst the best performers in the winelands”, he adds.
Malan says that most buyers in the estate are still reliant on bonds. The average loan-to-value ratio is at around 82.5%, slightly worse compared to 2015 when it was 85%. Buyers also now seem a little more cash strapped and struggle at times with the deposit requirements.
During 2015, 61 houses sold to the total value of R117 214 850 and at an average selling price of R1 921 540. Sales ranged from around R1.38m at the lower end to R3.6m at the top end.
“Last year, only 52 houses sold, largely due to low stock levels, to the combined value of R114 861 000 at an average selling price of just over R2.2m”. Malan says that only two units remained unsold due to occupation issues.
“The lowest price was R1.4m for an older small one-bedroomed cottage and the highest price achieved was R3.65m for a modern four-bedroomed home on plot of 292sqm in Fynbos street. Notably, the average gap between the asking and selling prices was just 3% and properties spent on average just 27 days on the market.”
More higher value homes were also sold last year with about 60% of all sales above the R2m price band.
Demand still outweighs supply as sellers seem to hold on to their homes as it is becoming too expensive to upgrade. In uncertain economic times, people tend to hang onto assets that weather the storm better and Malan says those assets are their homes.
“Welgevonden Estate has shown its investment value over the last two years. It is for example now similarly priced to Simonsrust in the suburb of Simonswyk that offers similar two and three bedroomed simplex and duplex townhouses in a secure complex, conveniently located in Stellenbosch. A small entry level two-bedroomed unit costs around R1.5m and a three-bedroomed duplex well over R2m, very similar to that of Welgevonden, but you do not have the added lifestyle benefit”, he says.
At the top end, the estate is simply unbeatable for value. The nearest competitor would be Brandwacht-on-River where entry level prices start at R5.5m.