Influx of younger home buyers to ‘non-metro’ towns
Increased price growth and activity in these residential property markets
Monday 28th of February 2022
Historically, statistical reports on residential property price appreciation and market activity tend to focus on the major metros and hubs in South Africa.
However, says Dr Andrew Golding, chief executive of the Pam Golding Property group, in recent years it’s become apparent that there are numerous towns which cannot be underestimated from a medium to long-term capital growth perspective, not to mention lifestyle and value for money – in many instances resulting in an influx of younger buyers.
“Take George for instance, with its own airport and extensive facilities and amenities including good schools. This is considered the ‘capital’ of the Garden Route, with buoyant activity in recent years. By extension it attracts business people wanting to relocate, semigrators and retirees seeking a gentler way of life in an appealing environment, among others, all looking to acquire primary residences or leisure property with a view to future relocation.”
According to Lightstone stats, recent buyers (February 2021 to January 2022) are widely distributed across all age groups, suggesting that George’s housing market holds broad appeal. However, with 43% of recent buyers falling into the 36-49 age category, and a further 16% young adults (18 – 35) it seems the town is also attracting a large number of young professionals and families.
Stephen Murray, Pam Golding Properties area principal in George, says the natural scenic beauty of the surrounds is highly appealing – including the Outeniqua Mountains which help ensure that the area enjoys good rainfall, providing a lush, tranquil environment.
Says Murray: “Many of our buyers are from Gauteng and the Western Cape seeking their ‘forever-homes’ – something that’s manageable now and into the future. We believe the reason for wanting to move to the Garden Route has not fundamentally changed – buyers are purchasing mainly for primary residential use and often with retirement in mind.
“Price growth can tend to slow demand, but generally it’s as a result of limited stock availability, which has meant that prices have been steady in their upward trend.”
Lightstone stats indicate strong, steady growth in George’s freehold residential property prices over the past decade, with a surge in activity in 2021, particularly in regard to vacant plots in estates.
Says Murray: “Vacant land in estates is mainly in the price range from R1 million upwards, while sectional title apartments start at R1.1 million and in regard to freehold, we don’t have any available stock under the R2 million mark. Once the estates reach sell-out, there is sound potential for new developments in the future with the costs of bulk infrastructure, which the Municipality would need to supply, expected to result in houses on existing estates remaining attractive.
“As a property class I also anticipate that in the not-too-distant future popular new developments may take the form of sectional title apartments as affordability becomes more important. Traditionally, George has not been a sectional title town, with 95.2% of homes comprising freehold, with 14.9% of these in estates.”
Sectional title prices in George have shown stronger growth in recent years, with the median price more than doubling over the past decade, while the median price of vacant plots has soared over the same period, rising from just R120 000 in 2011 to R795 000 last year (2021). Murray says because of the limited availability of homes in gated estates, vacant land presents good opportunities for builder-developers or end-user buyers due to future costs of land as well as upward pressure on building costs.
Adds Murray: “We have always been involved in marketing homes in Fancourt – with a new phase called Noem Noem launched three years ago, sold out. In a recent phase at Kingswood Golf Estate over 130 out of 155 stands have been sold, while Kraaibosch Manor, Kraaibosch Country Estate and Welgelegen Estates are now reaching sold-out stage, and a new phase of Kraaibosch Park has just been launched.”
|Total stock||% freehold||% estates||FH price (2021, Rm)||10-yr FH %|
|George||34 614||95.2||14.9||1.30||+333.3 *|
|Port Edward||3 443||75.3||13.3||1.065||+25.3|
*NOTE: increase in median price exaggerated by artificially low base in 2011
In Middelburg , a town in Mpumalanga which services farmers in the area, 34% of recent buyers were young adults, many presumably first-time buyers. As this is considered one of the top municipalities in the country, many people choose to live in Middelburg and work in nearby Witbank (eMalahleni). Adding to the town’s appeal, says Louis Greeff, area principal for Pam Golding Properties, between May and July 2021 the Steve Tshwete Municipality sold approximately 644 stands to the public. These included residential and commercial stands ranging range between R98 000 and R2.132 million.
Generally, across the market, vacant plots remain affordable, despite a doubling in price over the past decade. Greeff says accurately priced housing accommodation in the town is in high demand with a shortage of stock in the R800 000 to R1.2 million price range.
The majority of homes in Middelburg are freehold (88.3%), with just 3.23% of these located in estates. However, a recent development, Glen Cullen Private Country Estate, which is 100% off the grid, is selling well with the first phase of 39 stands 75% sold out, with prices ranging from R885 000 to R1.2 million (including VAT). Facilities on the estate include an equestrian centre, fishing, cycling, birdwatching, walking and running, while a school is also planned.
Following the trend towards a younger generation of buyers, the mining town of Rustenburg in North West Province seems to be regenerating and is experiencing an influx of young adult home buyers up to the age of 35 years, which now comprise more than a third of all purchasers, as well as middle-aged buyers. Although the town has experienced muted price gains, activity has rebounded steadily over the past decade, with a marked influx of young adult and middle-aged buyers.
According to Lightstone, while sales activity generally slowed between 2012 and 2017, both freehold and sectional title unit sales have rebounded in recent years, with vacant plot sales particularly strong in 2020 when the town registered the highest number of such sales in a decade. Of interest is that 50 new vacant plots were sold last year (2021), 44 of which are located in estates.
Says Ian Straarup, Pam Golding Properties area principal in Rustenburg: “Positively, the mines are stable and operating and also reemploying staff. As a result, there is limited rental stock available while there is a strong demand for properties below R1.5 million.”
Another mining town – Lydenburg , situated at the foothills of the Long Tom Pass in Mpumalanga, also reports a marked inflow of younger buyers, with the majority (57%) of recent purchasers being middle-aged (36 – 49 years) and a further 31% aged 35 years or younger, suggesting these are young professionals, first-time buyers and families. Although price gains have remained modest, activity has strengthened in recent years.
“Activity in the residential property market is high,” reports the company’s area principal, Andreas Greeff, “with demand exceeding supply.” The average price for a residential property is between R1.2 million and R1.6 million. Also positive for the market are initiatives by the mines to encourage the banks to co-bond employees’ purchase of homes rather than assisting with renting.
Says Greeff: “This is a mining community with an abundance of job opportunities, as well as being a thoroughfare to the Kruger National Park and with numerous tourist attractions with an hour’s reach, such as Blyde River Canyon, God’s Window, game parks and a host of leisure activities including mountain biking and flyfishing.”
According to Lightstone, activity in the residential property market has remained relatively resilient over the past decade, with sales surging in 2021 and performing well despite the lockdown. Furthermore, sectional title sales have more than doubled in recent years.
In Deneysville in the Free State, an extraordinarily high 78% of home owners have owned their homes for 11 or more years, indicating an unusually stable housing market. After remaining steady for much of the past decade, the sale of freehold homes surged in 2021, while vacant plot sales accelerated sharply in recent years – particularly in 2020 and 2021.
Explains Pam Golding Properties area principal, Phil Medlock: “Looking at these graphs shows the amount of people who during the Covid period have opted to move out of the cities to country towns. We have seen this trend with our ‘weekender’ homes whose owners now live at the dam and work from home or commute to Johannesburg. The vacant land sales have increased as well as the pricing, which has now moved over the R100 000 mark, and again most of these buyers are from the larger towns and cities, building both weekend and permanent homes.”
In contrast Port Edward on the lower South Coast of KwaZulu-Natal continues to attract older buyers such as retirees and mature people acquiring their future homes and mainly from the larger metropoles and the Eastern Cape, so the town retains its reputation as a desirable retirement destination.
“Value for money, a good year-round climate, beautiful Blue Flag beaches on a pristine coastline and top-class golf courses are a drawcard for this market, coupled with a close-knit, friendly community,” says Cath Molyneux, area principal for Pam Golding Properties. “We’ve experienced a definite uptick in activity since the hard lockdown as many people are able to work from home – some in semi-retirement or looking to retire here in the future, as well as existing retirees seeking their ideal permanent residence.”
Property in Port Edward remains extremely affordable despite median prices of both freehold and sectional title properties drifting higher over much of the past decade, with both strengthening sharply during the past year. The majority (75.3%) of homes are freehold, with 13.3% in estates. Beachfront properties and smallholdings are particularly attractive, available at affordable prices between R1.7 million and R 3.5 million.
Other local attractions include rock and surf angling, bass fishing, two ski boat clubs with launch facilities, hiking trails, nature reserves, mountain biking, bowling clubs, squash and tennis clubs and fitness centres, and the Wild Coast Sun a five-minute drive away with four golf courses.
Renowned for its trout fishing and with frequent snowfalls in winter, being about 2100m above sea level, picturesque Dullstroom in Mpumalanga is experiencing a new flush of interest in houses, cottages, smallholdings and farms. Only two-and-a-half hour’s drive from Gauteng, and with its clean air and water and tranquil setting, Dullstroom is popular as a weekend getaway from the city.
This town reflects a similar trend towards an older homeowner. With 65% of homeowners having owned their properties for 11 years or more, indicating a stable housing market, 35% of these are retirees, while 46% of recent buyers are in the mature age group.
While market activity is limited to less than 50 sales a year, freehold sales transactions have nearly doubled during the past 10 years, with 2021 sales close to the decade high of 42 units in 2019. Vacant plot sales soared to 22 last year – another decade high, while sectional title activity remains steady with single digit sales each year.
Says Elisme Swart, Pam Golding Properties area principal: “Apart from the mature age category, we are seeing families who want to work from home and raise their children in the countryside, as well as investors seeking properties to accommodate weekend tourists, leisure buyers and those looking to acquire trout farms. In regard to residential developments, the demand for Highland Gate golf estate is booming, while Walkersons Private Estate is also in high demand, being a low-density development with good trout water, walking and cycling potential.
Some three to four hours from Gauteng, Bloemfontein and Durban, the village of Clarens in the Eastern Free State offers a secure country lifestyle which is attractive to home buyers of any age, and being not far from national highways, commuting back to the metros is do-able, says Anne Maree, Pam Golding Properties area principal. “Through the first year of the pandemic and lockdowns, we saw three new restaurants open and had an exceptionally busy year from a property perspective, particularly as our internet coverage enables work-from-home, while many of our commercial properties and businesses have remained stable for the past 15-20 years, ours included.
“For our Gauteng home buyers, a unique characteristic and appealing feature is that our streets have no traffic lights, while our close proximity to Lesotho offers activities such as skiing, hiking, pony trekking and 4×4 adventures.
“Prices of residential properties here have been on the rise since 2014, and we have seen noticeable interest from buyers from within the province from other towns such as Welkom, Kroonstad, Bloemfontein, Frankfort, Ficksburg, QwaQwa and Bethlehem. Most of these buyers are looking for property in the R1 million to R2 million price bracket. We are also experiencing interest in Quillets residential development, with activity gaining momentum among purchasers from Bloemfontein and Gauteng. There’s also positive movement in the commercial market, mainly in the centre of the village.”
The town comprises mostly freehold properties (94.5%), 20.7% of which are located in estates. Clarens has high appeal for the older homeowner, with 46% of recent buyers (February 2021 to January 2022) falling into the mature age band (50-64 years). This is a very stable housing market, with 61% of homeowners having owned their properties for 11 years or more.
Meanwhile at the foot of the Drakensberg in Limpopo, Hoedspruit is arguably the fastest growing inland hub, with an active residential property market. Says the company’s area principal, Engela van Staden: “We are the ‘Safari Capital’ of the world. Our key selling point is definitely the bushveld – be it plains game or big five, people just love the lifestyle and tranquillity of the bush. The weather is good, we have lovely open spaces and offer a good selection of schools – including five primary and four high schools, a broad selection of interesting shops and restaurants, internet and also security.” Hoedspruit also offers a wide variety of sport options, golf, tennis, squash, trail runs, mountain bike routes and birding clubs.
Well-situated a stone’s throw from Kruger National Park, Hoedspruit is known for its majestically beautiful bushveld sunsets. The town is small but vibrant with interesting people making a living here. There are two rivers that flow all year round – the mighty Olifants River and the Blyde River.
Says van Staden: “Hoedspruit has always maintained a steady rise in property prices but in the last four years it has risen much higher and faster and people are still buying.” According to Lightstone, the town has experienced strong growth in median freehold property prices, rising by almost 160% over the past decade.
“We are seeing a growing demand for homes from city dwellers young and old from all walks of life, mostly from Gauteng, KwaZulu-Natal, the Free State and Western Cape. Homes in secure wildlife estates are popular for leisure and permanent residence and there is also a demand for townhouse complexes as these are more affordable, as currently homes on the older wildlife estates are priced from R2.5 million.
“We are currently selling plot and plan homes or just a stand in Elephant Rock Eco Estate, 80% of which sold out in the first phase and 15% in the second phase – priced from R1.8 million for plot and plan and from R350 000 for vacant stands. We are also exclusive marketers of homes in recently launched Leopards Lane, which is competitively priced under the R2 million mark for plot and plan homes.”
Posted by The Know - Pam Golding Properties