The magnetic pull of the Western Cape is growing even stronger as remote working sees more people migrating to this province’s many regions.
One example of this is the number of new building plans being passed in the province.
One of the most “interesting features” of StatsSA’s residential building statistics during 2022, says John Loos, property sector strategist at FNB Commercial Property Finance, has been the “meteoric rise” of the Western Cape to first spot in terms of total value of residential building plans passed and completed.
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The first five months of 2022 saw the Western Cape’s value of residential building plans passed account for 34.13% of the national total, above Gauteng’s 29.8% share. With the third largest market, KwaZulu-Natal came in at 19.03%.
“The picture was similar for residential buildings completed with the Western Cape having 40% of the national share in terms of value, Gauteng 31.3%, and KZN 15.2%.”
Loos says Gauteng’s share of the total market has conspicuously dropped from the 2020 to 2022 period of Covid-19 lockdowns and beyond.
“If the Western Cape sustains this stronger momentum in residential building activity, relative to the rest, 2022 will be the first year on record in which that province records a bigger value of plans passed and completions than Gauteng – and every other province.”
He adds that there has been “strong evidence” in the post-lockdown period of strong net semigration of skilled middle-to-higher income households to the Western Cape, and net outflows away from Gauteng.
“The semigration flows to the Western Cape have also increasingly broadened outwards from Cape Town, to the Southern Cape as well as up the West Coast, requiring significant new development activity in those regions.
“The sentiment towards the Western Cape has been decidedly more positive it would appear, attracting significant skills inflows and likely investment flows in the process.”
Brendon Lahana, principal of Chas Everitt St Francis Bay, says property sales in the area have rocketed in the past two years, and with supply exceeding demand by quite a margin, the average home sale price is now almost 60% ahead of the average for the previous 24 months. Excellent sales after the pandemic lockdowns in 2020/ 2021 were followed by exceptional sales from mid-2021 to mid-2022, and that there is no sign of demand slowing down even now.
“It’s very clear that St Francis Bay has gone from being a quiet holiday retreat to one of South Africa’s most popular ‘zoom towns’, with young couples, families and retirees flocking here from cities around the country to enjoy our peaceful and relaxed lifestyle.
“In fact, 400 new families have moved here in the past two years and now we are starting to see new property developments in response to the demand.”
The main drivers of the buyer influx, he says, were initially the very low home loan interest rates that prevailed until December 2021, and the huge spike in remote working, which gives people much more freedom to choose where they live.
“But there is also an ongoing trend towards living more simply and safely, and with more access to nature and outdoor activities, small country and coastal towns like St Francis Bay offer this.”
Lahana says the biggest percentage of buyers in the past year has been aged between 40 and 60, and that most have relocated from Johannesburg, Cape Town, and Durban.
The Plettenberg Bay market also remains on its upward trajectory, says Steven Neufeld, manager principal of Lew Geffen Sotheby’s International Realty Plettenberg Bay. So far, 2022 looks to be another record-breaking year for this popular seaside town in the Western Cape as semigration continues to fuel an already buoyant market.
“In 2021, the total value of sales broke the R2 billion mark for the first time in history, a whopping 82% up on 2020, with the number of sales increasing by 44% and average prices rising by 26%.
Claude McKirby, co-Principal of Lew Geffen Sotheby’s International Realty in Cape Town’s Southern Suburbs and False Bay, adds that many agents across most areas have reported a spike in enquiries from upcountry buyers.
Citing Lightstone data, he says that, during the first quarter of 2021, coastal property inflation was 6.2% and non-coastal 5.6%, however, but Q2 this year, property inflation on the coast had risen to 8% whilst inland it had dropped to 4.9%.
“The provincial picture for the same period is much the same with the exception being KwaZulu-Natal where property inflation dipped from 5.5% to 4.9%, although this has more to do with the devastating floods they recently experienced than the appeal of the region.
“Year-on-year, property inflation in Gauteng dropped from 4.8% to 3.8% whilst in the Western Cape it increased from 5.9% to 6.2% and Nelson Mandela Bay saw a significant jump with property inflation rising from 6.7% to 8.9% by the end of Q1 2022.”
Nancy Massing, managing director of the group’s Cape Peninsula franchises, says there has been a “notable uptick” in enquiries in across the whole Cape Peninsula from Muizenberg to Noordhoek since mid-2021.
“The region is attracting both local and upcountry buyers as it not only offers the quintessential seaside village and outdoor lifestyle, it does so at more accessible pricing than most comparative coastal areas and it also offers a very broad selection of properties.”
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