Plett Property Market Review 2019-11-11
Residential property selling prices are currently under pressure because the number of sales has steadily declined over the past 3 years. Interestingly, though, the average residential property prices remained unchanged over the same historic period. Average prices increased from 2016 to 2017 by about 16 % and then remained roughly the same thereafter (from R1,97million in 2016 to ±R2,35million thereafter). The number of sales declined from 528 in 2016 to 470 in 2017 (-11%) then again to 411 in 2018 (-13%). Then 233 sales from 01 January 2019 have sold and registered to date of writing; this number will increase as more sales register, but all indications are that it will be a further substantial decline in the number of units sold and probably the biggest decrease since 2016. Estate agents report around a 40% decline in business comparing the same period this year to that of 2018, though most achieved record years in 2018. Even though coming off a high base, this is a considerable decline. Local builders are also reporting that building activity, which was high over the past few years, will be slow for 2020 (builders normally have work lined up for next year, but many have little to nothing lined up now). Semigration (South Africans moving to Plett from elsewhere in SA) has seen demand remain high in Plett relative to the rest of the country, which has kept prices stable. Luckily Plett did not see the dramatic increase and subsequent decline that occurred in other areas like Cape Town, but indicators are that the property market will be tough in the near future. On the positive side, semigration is likely to continue and correctly priced properties should sell.
Plettenberg Bay broke the R1billion mark in 2016 and 2017; 2018 fell just short of this, and it looks like 2019 will be substantially lower. Looking at the trends in the graphs, we are currently in a downturn.
Entry level asking prices for houses and stands remained stable over the past year, but sectional title unit prices have increased slightly to an entry level of R800,000. The entry level for houses is around R1,75million, though there are cheaper options in areas surrounding Plett. Vacant land starts at about R250,000 in gated estates and R425,000 in open areas.
Top asking prices for properties currently on the market are as follows: R35million for vacant residential land (non-development), R9,5million for apartments, R50million for houses and R75million for coastal estates. Top prices obviously fluctuate considerably depending on what is on the market at the time.
Hein Pretorius, Broker Principal of Sotheby’s International Realty Plettenberg Bay, sold the highest price residential properties in both 2018 and 2019 (2018: vacant land in Robberg Beach End for R35million and 2019: R30million for an upmarket beachfront home in Alguada Reef Road). Over the past few years there have been a number of sales on Beachy Head Drive over R30million where houses were demolished to make way for new homes. The highest was R36million in 2017. However, a similar site is currently on the market at an asking R32million. For apartments, the highest price in 2019 so far is R7million in The Sanctuary One and in 2018 it was R9,9million in De Meermin. The historical record price for residential property remains unchanged and has been held since 2006 by Hein Pretorius at R50million for a luxury coastal estate.
Pretorius says: “After a good run, the market has turned. We have done well and for that I am grateful. Even in a depressed market, there are always sales. We are lucky to live in such a beautiful place in the Western Cape. It truly is a special place to visit or live, which, in property terms, translates into one of the best performing markets in the country.”
“In 2012 we had over 1000 properties listed for sale. This declined to the 600s in 2017 and is now climbing again. We currently have around 750 properties listed.”
“It is a good time to buy as there are a number of well-priced properties available. For example, Duin-en-See offers great value in a brand new gated eco-estate on Robberg Beach. Plot prices on the beachfront range from R11,5million to R27,6million. Where else can you buy beachfront land in Plett for these prices? On the back prices are at R4,485million.”
The hamlets surrounding Plett fared similarly. There are very few sales in these areas, 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 down from 2015 & 2016); in 2019 seven properties have registered so far for an average of R863,000. 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. Natures Valley saw averages of R3,8million in 2018 with 12 registered properties and 2019 saw three properties register for an average of R3,5million.
The figures above were taken from deeds information on the 11th of November 2019. 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 R200 000, known non-arm’s length 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) are not included in the figures. A number of sales are still in the registration process, so the statistics and graphs for the last year (2019) in particular will change substantially in future.
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