Plett Property Market Review 2021-04-08
Plettenberg Bay’s property market is booming. Record sales have been recorded since the lifting of the Covid-19 lockdown on 1 June 2020. Estate agents are reporting that it has been like peak summer season ever since which is traditionally the busiest time of year.
Statistics for 2020 are somewhat skewed due to the lockdown, but the year started slowly due to national recession, then ground to a halt due to lockdown, and then picked up considerably in the second half of the year. 2021 is faring even better with record first quarters being reported by multiple estate agencies with the increases being dramatic. For example, Sotheby’s International Realty Plettenberg Bay has been involved in over R405million worth of sales since the beginning of the year. To give this some perspective, the slowest year in Plett in the past decade was 2011 where the total sales in the whole town were at R453million. From 2016 to 2018 Plett’s totals were just over R1billion each, then dropped to R812millin in 2019, and will likely break the R1billion mark for 2020 again as more sales register, and if the 2021 boom continues it will be substantially over R1billion.
Prices are beginning to increase again with some properties achieving full asking prices after being on the market for a relatively long time. Current statistics show a ±10% increase from 2019 to 2020, but this was off a low base, and should be contextualised as the increase for the past five years was ±3.3%. The historical record price for residential property, which was previously in place since 2006 (R50million), has finally been beaten by a R55million beachfront home on Beachy Head Drive in 2021. Another notable recent sale is an Old Plett home above Look Out Beach for R38,350,000. In 2020 the highest price was R44million for a beachfront home in a gated estate on Robberg Beach.
The current boom came as quite a surprise as economists were predicting a considerable decline post-lockdown; -8% was predicted due to the combination of the recession, national structural problems, and the effect of lockdown. They did, however, warn that the property market is slow to react. The expected oversupply of property has not happened, and stock on the market is currently declining (approximately -15% from March 2020 to March 2021). This puts upward pressure on prices.
Buyers are still predominantly from Gauteng and Plett (roughly 35% each), followed by Cape Town (±12%). International buyers dropped slightly to ±6%.
The total number of sales in Plett rebounded in 2020 after a steady decline over the previous 3 years. The number of sales declined from 2016 to 2017 by -11% (528 to 470 sales), then a further -10% in 2018 (421 sales) and then -15% to 357 sales in 2019 which is the biggest decrease since 2016. At the time of writing the 2020 sales that have registered are at 390 (+9% in comparison to 2019).
Entry level asking prices within Plett remained relatively stable for several years but increased in 2020. Full title homes start at R1,850,000, but there is not much available below R2million. Sectional title unit prices start at R950,000 (previously R750,000). Vacant land starts at about R273,000 in gated estates and R525,000 in open areas (up from R425,000). There are cheaper options in areas surrounding Plett.
Top current publicised asking prices for properties on the market are as follows: R75million for a coastal estate, R26,45million for vacant beachfront land in an eco-estate, and R7million for apartments. Top prices obviously fluctuate considerably depending on what is on the market at the time.
Hein Pretorius, owner broker of Sotheby’s International Realty Plettenberg Bay, says: “After a good run, the market turned in early 2020 and then disaster struck due to the lockdown. We were pleasantly surprised by the dramatic increase after lockdown was eased. We’ve continuously had record months since then and each month keeps improving on the last. Across the board the market is doing exceptionally well. The top end of the market is doing well again with renewed interest and many +R25million sales.”
“I think that Covid-19 has caused a lot of people to introspect and re-evaluate their priorities, and many to realise that they can do more work from home or remotely, which has led to the current influx. Plett is truly a special place to visit or to live in, which, in property terms, translates into one of the best performing markets in the country.”
“It is a good time too sell if you are thinking of selling as there are buyers around and you can achieve a decent price for your property. It is also a good time to buy as the interest rates are low and asking prices have been fairly stable recently, and in the long term Plett will retain its popularity. There are still a few good value properties available, but stock is declining.”
In the towns surrounding Plett there are normally very few sales, so statistics need to be seen in context and treated with some circumspection. In Wittedrift 13 properties transferred in 2018 for an average of R772,000 (a record number of sales, but averages were down from 2015 & 2016); in 2019 seven properties registered for an average of R863,000; in 2020 8 properties registered for an average of R673,000. In Keurbooms proper (main town) four properties transferred in 2018 for an average of R7,86million, the highest being R9,75million for an older beachfront home; in 2019 ten properties transferred for an average of R4,4million; in 2020 five registered for an average of R6million. Natures Valley saw averages of R3,8million in 2018 with 12 registered properties, 2019 saw four properties register for an average of R3,6million, and in 2020 4 properties for an average of R3,8million.
The figures above were taken from deeds information on the 08th of April 2021. Sales for Plett are listed by date of sale, not transfer date, to provide a more accurate depiction of the market. Rural property, sales below R100 000, known non-market-related transactions and duplications (e.g., when a developer buys numerous properties for a single price and each is listed at the full price, only the single figure is taken), and outlying areas are not included in the figures. Several sales are still in the registration process, so the statistics and graphs for the last year (2020) in particular will change substantially in future. Other statistics are taken from Sotheby’s International Realty Plettenberg Bay’s figures.
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