Garden Route still good investment

The internationally renowned Garden Route remains high on home buyers’ priority lists, being an area with high appeal and excellent investment potential – whether they are seeking a permanent home, holiday getaway, pure property investment or a home to retire to either now or in the future.“While capital return on investment remains sound, the property market still offers good value for money,” Louis van Niekerk, regional manager for Pam Golding Properties (PGP).

In George property values have increased dramatically over the past four to five years, with a large influx of buyers from Gauteng and the Free State. While at the top end of the market PGP recently sold homes for R4,5m and R5,9m, a quality family home requiring little or no work can be purchased for an average price of R1,5m.

George is in the enviable position of being close to beaches, the mountain and just four hours’ drive from Cape Town and Port Elizabeth, further enhancing its investment potential.

Van Niekerk says in Wilderness property sales have exceeded all expectations. A key element of its charm is that Wilderness has retained its natural beauty, as the local council has stringent requirements in place regarding new developments.

“Over the past six years the residential property market has been buoyant with sound capital appreciation, and generally property owners have at least doubled their money over the past three years. In 2003, a stand in an upmarket area which sold for R300k has just resold for R1,3m. A three-bedroom unit close to the lagoon and village, with sea views, sold for R595k in 2003 and resold in 2006 for R1,75m.

“Most investors are from Johannesburg and Pretoria, many being entrepreneurs relocating for a better way of life. We’ve also noticed a trend towards younger buyers and ‘Black Diamonds’ seeking residential property here.

“Properties are many and varied, ranging from vacant stands for which one would pay at least R800k to R1,5m, to duplex apartments a stone’s throw from the beach and lagoon priced at R990k, log cabin homes priced from R1,2m to R1,6m, and a broad range of houses priced between R1,5m to R12m for a beachfront house.

“For those preferring a more rural lifestyle, smallholdings range from R1m to R3,5m, and exceptional country residences are priced from R3,2m to R13m.”

Plettenberg Bay has grown at a phenomenal rate over the past five years, with building activity in the newer areas of Brackenridge, Whale Rock and Schoongezicht continuing apace. As a result, more young people with families have moved into the area.

Over the past year the average house price increased by some 25%, with most of the properties selling in the R1m to R2m price range. Currently, an entry level home costs R1,5m and apartment R850k.

Mossel Bay and Sedgefield continue to reflect sound returns on good quality properties, with the former experiencing strong commercial growth and in terms of residential property a high demand in the lower end of the market as well as primary houses – particularly among upcountry buyers.

Sedgefield’s property prices doubled in 2004 and then stabilised to more sustainable annual returns of around 10%. Seafront property which in 2004 was around R1,5m for a stand is now going for around R3m, reflecting excellent returns.