Property stock shortages on Garden Route slow market Property stock shortages on Garden Route slow market
Current property and vacant land stock shortages in the Garden Route have led to asking prices in the region increasing sharply this year, and... Property stock shortages on Garden Route slow market

Current property and vacant land stock shortages in the Garden Route have led to asking prices in the region increasing sharply this year, and it is not only South Africans who are choosing to move to this picturesque part of the world, international buyers are also lapping up high-value properties in the area, says Antonie Goosen, principal and founder of Meridian Realty. 

Goosen says semigration is no longer a buzzword, it is a trend that has been gaining momentum as early as 2016 as people initially sought to move to metropoles with the best service delivery. This sparked the trend, initially, to move to the Western Cape. However, off the back of Covid and with the ability for some industries to work remotely, semigration gained traction but diverted into other parts of the country as people sought to escape traffic and congestion all in search of a better quality of life.

“As we reported last year this is when places like the Garden Route and other coastal towns saw an influx of ‘semigrators.’ As this trend continues, property and vacant land stock shortages have influenced property prices significantly,” says Goosen.

“Looking at the annual sale and listing trends on the Garden Route, according to Property24, in 2020 the number of sales registered at the deed’s office was 6693, the average asking price was R1.75 million and the average sale price was R1.25 million.

“In 2021, sales rose to 9857, the average asking price was R1.85 million and the average sale price increased to R1.42 million. Looking at 2022, sales are currently sitting at 4407 and this will rise over the remainder of the year, asking prices have increased sharply to an average of R2.25 million and sales prices have increased to R1.55 million on average.

“The rise in the asking price is a result of dwindling stock levels. Property24 confirms reduced stock levels with properties on the market in June 2021 at 23,238 and properties for sale in May 2022 (almost a year later) dropping to 15,078,” says Goosen.

According to Bert White, Meridian Realty property professional working in George and along the Garden Route, even these stock levels are inflated as they encompass all properties for sale, not necessarily those that people semigrating might be seeking to buy. In other words, properties with enough space to work remotely and offer the quality of life, scenery, and other needs that “semigrators” seek. These often place them into the mid to higher-end property category and this is where stock levels are particularly low.

“George is increasingly a preferred town for ‘semigrators’ looking along the Garden Route as there is an airport in George as well as more schooling, medical services, and larger town comforts in terms of availability of shops and other amenities. George also boasts higher asking and selling prices as a result with the average 2022 asking price sitting at R2.29 million and the average selling price at R1.8 million according to Property24. What is staggering, however, is the stock levels which are at 3205 across the property spectrum,” says White.

White elaborates and says, those that are semigrating typically seek, three-to-four-bedroom homes or more, which offer certain lifestyle comforts. These buyers are moving in an effort to improve their quality of life and require space for remote work over and above the bedroom and living space.

Looking at property prices in this market, according to Property24, the average asking price for a three-bedroom home is R2.75 million, this spikes significantly when you look at the average price of a four-bedroom home which is listed at, on average, R4.79 million and five-plus bedrooms listing at, on average, R5.98 million. 

He goes on to say that “One out of five buyers are moving to George due to the work from anywhere phenomenon. Most of these buyers are from Gauteng followed by Mpumalanga and the Freestate. This has not changed since last year.”

Reflecting on how this continuing trend is playing out, White says: “In 2021 stock levels were already low – we saw buyers purchasing vacant land either in estates or free-standing erfs in order to build from scratch as the building was more affordable and interest rates were low.

“This year, virtually all the erfs are sold barring a few in Blue Mountain Estate, Eden Residential Estate and Kraaibosch Ridge. Limited land, paired with high building costs have caused buyers to shift to buying properties with the view to renovating more recently.”

Looking to the Mossel Bay area of the Garden Route, a similar picture is painted by Tinka Dunker, Meridian Realty property professional working in that area of the Garden Route. Tinka notes the same lack of stock and has experienced a bit of a lull since the latest increase in the petrol price.

“Vacant land in estates like Nautilus Lifestyle Village in Mossel Bay is selling for R1 million and above and we recently sold a property in Nautilus and then resold the same property three months later with a price increase of R300,000. This shows how demand is pushing prices up.

“Pinnacle Point Golf Estate prices have seen record highs too with buyers not just locally investing in the estate, but a major percentage of buyers are international investors purchasing property in the area. I also see South Africans returning from abroad buying property in the area at high price points,” says Dunker.

Goosen believes the higher-end market will continue to move, albeit slower than before.

“The Garden Route can only accommodate so many people from an infrastructure point of view too, and this functioning infrastructure is what makes the Garden Route so attractive, so this cannot be compromised through over development.

“Limited stock and land availability will keep prices high for now, although buyer resistance to increasing prices is starting to become a factor, especially in the middle to the higher end of the market.

“Renovating homes is becoming more of a trend and even some retirement homes are being converted into homes on the outskirts of George to accommodate younger families,” concludes Goosen.

Antoinette Panton

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