Western Cape coastal towns, particularly along the Garden Route, are
experiencing a dire shortage of affordable housing as semigration-driven
demand continues to drive up prices, estate agents say.
According
to Lightstone data, the Western Cape is still by far South Africa’s top
semigration destination, with 6,406 households from other provinces
having bought property in the province in 2023. Gauteng had the second
highest influx of residents, albeit almost three times lower at 1,971.
Among
the Western Cape towns, Mossel Bay in the Garden Route region
experienced the highest influx of residents last year, causing property
prices to rise well above pre-pandemic levels.
Although the
market has stabilised since the 2021/22 post-pandemic rush, semigration
is still a significant driver in the area, says Peter Máre of Lew Geffen
Sotheby’s in Mossel Bay.
A family-sized three bedroom home could
be bought for around R1.8 million in 2021, and although there are still
a few fixer-uppers available for under R2m, today freehold homes of
that size are generally priced between R2.5m and R3.8m. Furthermore
there is now a wider array of properties in the R5m to R10m price band.
“Although
the market peaked in 2022 with a record high of 1,160 property
registrations, demand has remained strong and property values have
continued to grow,” Máre said.
The Garden Route town has become
popular with upcountry buyers because of its proximity to the George
airport and the lifestyle on offer, he added. It is also considered to
have one of the best-run and most financially stable municipalities in
the country.
Although it has become less affordable in recent
years, Mossel Bay property is still more accessible than some of the
other Garden Route towns.
Plettenberg Bay saw its values rise by
around 24% in 2023, according to Steve Neufeld, Manager Principal of Lew
Geffen Sotheby’s in that town.
The average property value in
Plett has risen from R2.4m to R4.1m in just four years, and it has
become difficult to find free standing houses for under R3.5m. Sectional
title units start at around R1.5m, but flats and vacant land are in
short supply.
“There are a few residential developments in the
pipeline, however, the town’s projected growth is beyond the projected
increase in supply, and there is already a dire shortage of affordable
housing,” Neufeld said.
More upscale properties are entering the market too, with two listings currently advertised at more than R50m.
Knysna
property prices have also surged to new records, from an average of R2m
in 2021 to R3.51m this year. And it’s not just the Garden Route that’s
seeing such tremendous growth as the small coastal towns closer to Cape
Town are also seeing record prices.
Hermanus, which is considered another hot semigration destination, saw its median house price hit R2.51m in 2022.
“We
first started to see renewed activity at the beginning of 2021 when
people were starting to adjust to the new normal and plan ahead, and
there has been a steady and notable upswing since then,” says Brett
Sparg, Managing Director for Lew Geffen Sotheby’s in Hermanus.
However
the town’s geographical and environmental constraints mean the scope
for new development and further physical expansion is limited, Sparg
added.