Homes are coastal jewels

Homes are coastal jewels

Category Property News

The residential market in the laidback and characterful ocean-side suburbs of Noordhoek and Kommetjie is booming, with both areas enjoying an increase in property values and the number of sales in the past three years.

Property values have increased significantly since the market last peaked in 2007, with both suburbs seeing more houses sold in 2014, says Steve Thomas, franchise manager for Lew Geffen Sotheby’s International Realty in False Bay and Noordhoek.

During 2014 thirty houses, to a total value of R92m were sold in Noordhoek, while last year 25 houses were sold for R97m.

In 2007 the average house price was R1m, increasing to R3m by 2014 and to R4m last year, he says.

“While there were more sales in 2014, last year we saw an upswing at the top end of the market, with four transactions achieving more than R7m, two of which breached the R8m mark.”

Lightstone figures reveal equally impressive growth for Kommetjie, where the average house sale price increased from R2m in 2007 to almost R3m in 2014. This translates to a year-on-year compound return on investment of 7% during that period. By last year the median price was nudging R3m.

Thomas adds Noordhoek has offered an inflation-beating nominal return on investment of 15% per year (calculated over nine years), with Kommetjie achieving the same return if measured over a 10-year period.

This picturesque area is increasingly grabbing the attention of families and retirees wanting to move away from the city, as well as buyers from upcountry looking to move to the Cape or invest in second homes. This has resulted in a notable change in the demographics of buyers and residents.

No longer sleepy villages populated mostly by laidback creatives and the surfing community, both Noordhoek and Kommetjie are attracting a growing number of affluent professional investors, with the Living Standard Measure of residents in both suburbs now being 10.

Lew Geffen, chairperson of Lew Geffen Sotheby’s International Realty, says: “What hasn’t changed is the fact that property owners in both suburbs tend to hang onto their homes for longer than in many other areas.

“A recent survey concluded in January this year revealed that in Noordhoek 41% of owners have lived in their homes for 11 years or longer, with 15% having stayed for eight to 10 years.

“In Kommetjie the figures are 54% and 12% respectively.”

Also notable is the spike in the percentage of owners who have lived in the area for less than five years, corresponding with the recent market surge and increasing popularity of the suburbs, he explains.

The Lightstone report also reveals that home ownership is now almost evenly split over all age groups in both Kommetjie and Noordhoek, except for the over-65s – pensioners only account for 2% and 3%, Geffen says. “This is especially true in Noordhoek, where 32% of home owners are aged 50 to 64, 36% are in the 36 to 49 age group and 30% are 35 or younger,” he says.

“In Kommetjie the 36 to 49 age group dominates with 42% ownership, followed by owners aged between 50 and 64 who make up 30% of home owners. 26% are under 35 years of age.”

The growing interest from buyers is due to the unique and exceptionally attractive appeal of the area and the suburbs themselves, Thomas says.

Author: Lew Geffen Sotheby's International Realty