Have St Francis property values increased over the last ten years?

Yes! And at a rate better than the South African average … even better than the Western Cape!

We estate agents often get asked “How is the St Francis property market doing?” and we have said for the last few months “Well, we at Pam Golding have had an amazing last 12 months!” … which doesn’t fully answer their question. It suggests that the St Francis property market activity has been good, but doesn’t tell them how prices have been moving.

So I have done a proper analysis.

A property has to sell twice to measure price growth. Trouble is that houses are often renovated, so an increase often doesn’t reflect the full story. So the best way is to study plots. But the Deeds Office records don’t show whether a property transaction is for a house or vacant land. So it requires the in-depth knowledge of a local estate agent!

The Deeds Office records around 1800 transfers in St Francis Bay (excluding Cape St Francis and the Links) since 1 January 2011 (just over ten years ago). With a nifty excel formula, I extracted all the erven that had transferred more than once. I then manually excluded the erven that I know have houses on them, and the middle transaction if there were more than two transactions for the same plot (surprisingly lots of these). I was left with 94 plots, each with two transfers. I then calculated the return pa for each.

The median return for the 94 plots which have sold more than once since 2011 is 8% pa . I think this is a large enough sample, so I am confident that my results are meaningful. This return means that you would have doubled your price in 9 years, excluding transactional costs and holding costs (rates and service availability costs).

This is a better return than the average of about 4.5% for South African residential property over the last ten years. Even the Western Cape has only been at about 7%.

Our figure of 8% pa for St Francis property is similar to the JSE returns over the same period. The JSE has also more than doubled in value since 2011, although 6 months ago, St Francis property would have looked the better option! Since then, the JSE has had a very good run.

Stripping out inflation of about 5% over these years from the 8% pa, gives a real return of 3% pa for St Francis property.

My 94 plots were from three areas: 26 canal plots, with a median return of 8% pa, 20 Marina Village plots (off the water), with a median return of 12% pa (we know how popular they have been over the last few years!), and 48 Santareme plots, with a median return of 7% pa (where we have also noticed price increases, particularly over the last year).

When I exclude sales in 2020 and 2021, the canals and Marina Village median returns are unaffected, but the Santareme plots return drops dramatically from 7% to 3%, showing how well prices have moved upwards recently.

By the way, the median time that plots were held is only 2.7 years!

As we say to buyers, you are not buying an investment, you are buying the wonderful St Francis lifestyle! (but it seems you are also buying an investment!)

Posted by The Know - Pam Golding Properties