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Garden Route's boom time is offset by growing stock shortages THE GARDEN Route property market has unequivocally recovered from the 2008 crash, bouncing back with an alacrity that is seeing agents reporting a steady upsurge in demand in the past year as well as a growing dearth of available stock in many areas. That is according to Steven Neufeld, manager principal of Lew Geffen Sotheby's International Realty in Plettenberg Bay. He says: "The first half of 2016 has been our best year to date for this period and, while there has been significant market growth across the board, the most notable increase has been in the demand for homes in gated estates and sectional title schemes. "It's also very encouraging to see that Plett's surfeit of vacant land is selling well again as an increasing number of astute investors are realising that plots here are very accessibly priced and that it's still possible to buy land for considerably less than the development cost." Tim Kirby, principal of Lew Geffen Sotheby's International Realty in George and Wilderness, also reports a buoyant trendbucking market which shows no signs of abating. "We have been exceptionally busy in George and Wilderness during the past year with demand steadily growing, but the unrelenting demand is beginning to affect stock levels which will be under severe pressure by yearend. "Interestingly, the market energy hasn't yet translated into a perceptible hike in property prices as it has in most coastal towns in the Western Cape, so there is still excellent value to be found in and around George where investors can buy a lot more house for their money" The most active segment in George is the mid to upper market sector with the most popular properties being in the R1.8 million to R2.8m price band, and Wilderness is currently experiencing a mixed demand for wellpriced vacant stands and developed properties. Dwindling stock levels are also likely to be Knysna's biggest challenge for the remainder of 2016 according to local Lew Geffen Sotheby's International broker principal, Sheena Mare. `Although the upswing we are currently enjoying has been phenomenal for sales and economic growth for the area, we are beginning to see a shortage in available stock, especially in the entry level and middle markets. "This is not only an impediment to prospective sales, it is also pushing up prices and in the past year alone, we have seen entry level prices in the most soughtafter areas increase radically" Mare says that although the top end of the market is still the least active with a wide selection of property available, there has been a positive shift in this sector since the beginning of the year. "Until recently sales of properties costing more than R5m were rare and considered noteworthy, but buyers are now prepared to invest a lot more in Knysna and we have received a great deal of interest in our property listings in the R1Om plus price band." Hein Pretorius, broker principal for Lew Geffen Sotheby's International in Plettenberg Bay, says: "With 483 property registrations already recorded between January and the end of July, 2016 looks poised to be a recordbreaking year, with the previous high being in 2011 when 611 properties were registered. "It's a distinct possibility when you consider that almost 40 percent of the house and estate sales concluded during the past year occurred in the past three months between May and July, with 57 sales worth a.combined value of R121.21m and 47 transactions worth a total of R131.67m respectively" Citing Lightstone data, Pretorius says: "These figures also highlight the soaring demand for homes in secure estates which only make up around 21 percent of a property landscape still dominated by freestanding houses (65 percent)." Lew Geffen, chairman of Lew Geffen Sotheby's International Realty says that although slower on the uptake, the Garden Route's market revival was inevitable consider ing the Western Cape's market surge in recent years and the main driving forces. "The growing influx of upcountry investors moving to the Western Cape has seen property prices in Cape Town soar and as a result, buyers have started to look further afield to other coastal towns where they can enjoy a relaxed lifestyle at more accessible prices. "Sales to buyers from other provinces now make up 35 percent to 40 percent of all transactions in the Garden Route and include families seeking a better quality of life as well as retired people wanting to enjoy their golden years at a slower pace away from the hustle and bustle of city life." Says Mare: "For the first time we are now selling more primary residences than holiday homes to Gauteng buyers and we have also had a record year of sales to foreign investors (18 percent) who are attracted by the weak rand and are also driven by the increasing instability in Europe due to the refugee crisis, terror threat and lacklustre economies." Neufeld also reports an increase in foreign buyers in Plettenberg Bay this year with these investors accounting for 15 percent of their sales as opposed to around 5 percent, which has been the average for the last few years. "Most of our investors (35 percent) are from Gauteng with most of the sales being cash, a quarter of the buyers are local and about 10 percent are from Cape Town and a similar number are from Pretoria." The rental markets in all three areas have also spiked with a dramatic increase in demand for longterm rental properties with a subsequent lack of suitable available homes being reported by all agents. However, the market revival and boost to the economy in the Garden Route is also attracting developers and there are several developments under construction or in the pipeline to service the ongoing demand. In Knysna two large retirement villages are being built and a lifestyle estate in Brenton on Lake alongside the lagoon is also under way Several gated.communities and retirement villages are under construction in George and in Plett a modern sectional title development was recently.completed.
Author: Lew Geffen Sotheby's International Realty