Small town property sales boom on exodus from the cities

Small town property sales boom on exodus from the cities

Lightstone data shows that about 20% fewer people are now moving from cities to cities with more choosing to relocate to smaller towns, especially since the onset of the pandemic. According to the Seeff Property Group, more people are also purchasing second homes in small towns.

It is also not just older buyers in the 45-65 year age range, but younger professionals and families are also ditching the cities for the countryside, say Seeff’s property agents.

The largest exodus is out of Gauteng (44% of those leaving the cities), followed by the Western Cape (up to 30%) and KZN (up to 12%). Those moving from Western Cape and KZN cities tend to choose smaller towns in their own provinces while Gautengers are mostly going elsewhere, often to the Western Cape and KZN, and to a lesser degree to Mpumalanga, the Eastern Cape and North West.

For Gautengers, Hartbeespoort is a popular choice. Donna Nass, Seeff licensee for the area, says the town’s proximity to Johannesburg and Pretoria makes it ideal. The market achieved record transactions over the last year, ending 52% higher than in 2020 and 56% higher than the annual average since 2011. The large volume of estates in the area is a big draw-card and this is complemented by leisure and basic amenities around the town.

READ MORE: Weekend DIY projects that add to home value

In the Cape region, small country and coastal towns have benefited greatly from the pandemic-induced lifestyle shifts, says Ian Badenhorst, MD for Seeff Country and Karoo. Contrary to expectation, towns such as Swellendam quickly recovered to pre-pandemic levels, and they have seen the highest turnover since 2017.

Buyers are mostly from other areas according to Val Anderton, a property practitioner with Seeff Swellendam, who says well-priced properties can sell within 3-5 days and there is now a shortage of stock on the market.

The town is well located as a popular stop-over to the Garden Route and boasts a strong agricultural economy, good schools, clean air and wholesome living. It also offers many great retirement options. There is also still good value in the market in the R2 million to R3 million range while rentals average around R9,000 to R14,000 per month.

Another small town which is drawing buyers from as far afield as Gauteng, KwaZulu-Natal and Mpumalanga is Ladismith in the Karoo according to Sonja Claassen, a property practitioner with Seeff. The market has seen the highest turnover in five years.

READ MORE: Building plans and compliances; get your house in order before selling

The town is only about a 90-minute drive to George and the seaside and offers an affordable alternative with the busiest price band being between R850 000 to R950 000 to around R1.5 million. Rentals are mainly around R4,500 to R6,000 per month. Aside from houses, lifestyle farms are also a popular option for those from the cities.

Meanwhile Willie Janse Van Rensburg, a property agent from Seeff Riversdale, says the market there is also now up on the pre-Covid levels as people are flocking from the cities to the area. Lifestyle farms in the R4 million to R5 million range are particularly sought-after and a sizable chunk of buyers are from around the Cape metro looking to relocate to the Southern Cape.

The coastal town of Gansbaai, just south of Hermanus also achieved record turnover over the last year. Marlene Uys, a property agent with Seeff Gansbaai says there has been an influx of buyers, largely from Gauteng and KwaZulu Natal.

Gansbaai is very accessible from Cape Town and a great place to retire or invest in a holiday home. It has good basic facilities including fibre. The busiest property band tends to be around R1.5 million to R1.7 million while the average monthly rental is R7,500.

Further south, Richard Pratt, manager for Struisbaai, Aghulhas and Suiderstrand says the pandemic has been a big boost with property demand spiking since the onset since the first wave. Houses under R3 million seems to be most in demand, but vacant land under R600,000 is also attracting interest. Affordable property has become very scarce.

People are mostly buying holiday houses, however, many, and especially younger people in the 30-50 year age groups are starting to relocate here permanently. If priced correctly, a property can sell within a month, or even less. Mr Pratt says properties which offer something extra, like location or views will sell very quickly.

READ MORE: Finding great value-for-money suburbs in Gauteng

Plettenberg Bay on the Garden Route has also seen a record year with several high value sales as people flock to the town on a permanent basis as well as investing in second homes according to Alet Ollemans, Sales Director for Seeff Plettenberg Bay.

On the Cape West Coast, the town of Langebaan also achieved record transactions over the last year amounting to a significant over R1.3 billion in market value with huge demand, especially in the R1.5 million to R3 million.

The KZN South Coast has also attracted more buyers from elsewhere since the onset of the pandemic according to Michelle Harris, licensee for Seeff in the area. Local markets here not only bounced back to pre-pandemic levels, but areas such as Amanzimtoti, Hibberdene, Port Shepstone and Margate achieved record transaction levels last year. We have seen more people looking to relocate to the smaller towns or invest in second homes to escape the cities given the rising WFA (Work from Anywhere) trend, she says.

Mr Badenhorst says moving to a small town has significant advantages. Clean air and healthy living make these a more wholesome environment to raise children who can still walk to school or ride their bikes and play in the streets. Most towns have good basic infrastructure and are not too far from big centres.

READ MORE: Get the home loan you deserve in five easy steps

SUBSCRIBE: to our content here 

How property market trends affect you

How property market trends affect you

There are many external factors at play when buying, selling, or renting property. Potential buyers and investors need to be aware of these greater property market trends to plan for how the conditions will affect them. There are two main ways to describe the condition of the property market, namely whether it is a seller’s market or a buyer’s market. Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, explains that these terms can have a range

of implications for anyone involved in real estate transactions. To elaborate on these implications, RE/MAX of Southern Africa explains how these two market trends will affect buyers, sellers, landlords and tenants:

Buyer’s / Tenant’s Market:
The market swings to the favour of buyers or tenants when there is an abundance of similar homes for sale or for rent in an area. This oversupply will drive down demand and prices are likely to be dragged down along with it. In these conditions, a seller might want to hold onto the current property until market conditions change. For landlords, these conditions make it tricky to charge more in rent, because there are plenty of other rentals available if the current rental amount is not appealing.

READ MORE: Common delays on property transactions

Seller’s / Landlord’s Market:
In a seller’s or landlord’s market, there are fewer homes for sale and for rent. This drives up demand which also pushes up asking prices. Buyers will need to act fast and make competitive offers when looking to purchase in these kinds of markets. Similarly, tenants will need to act fast and get their applications in first to make sure theirs is the one that gets accepted by the landlord.

Timing the market
It is challenging to time the market right so that you sell in a seller’s market and buy in a buyer’s market. Goslett reminds homeowners that when selling a home to buy a new home, the advantage from the one market will be offset against the other. “For example, sellers might be able to sell for more in a seller’s market, but then they will also likely purchase for more too. Similarly, in a buyer’s market, homeowners might sell for slightly less, but they will also be likely to purchase a home at a better price.”

It is important to remember that each suburb will also have its own micro trends that can either mirror or be completely opposite to greater market trends. While it is easy enough to find out what type of market conditions the country is experiencing as a  whole, local suburb trends are best discovered through a conversation with a local

READ MORE: Things to consider before joining property stokvels

suburb expert.

“With access to real time data on the average time on market and price per square metre in the area, real estate professionals can share suburb-specific information that can help consumers to gauge timeframes and possible costs or returns. This information can help buyers, sellers, landlords, and tenants make better decisions when it comes to their real estate transactions,” Goslett concludes

SUBSCRIBE: to our content here 

Uncovering the best property structures in South Africa and Mauritius

Uncovering the best property structures in South Africa and Mauritius

With the correct structural separation of assets and liabilities, in specialised trusts, one can build an ever-growing property portfolio without using your own capital.

Coert Coetzee, founder of the Wealth Mastery System, together with Johannes Maree, Chartered Accountant, and Annemarie Schutte, Trust Lawyer, will show you how this can easily be achieved – in both South Africa and Mauritius.

Date: Thursday 10th March 2022Topic: Uncovering the best property structures in South Africa and MauritiusPanelists:

Coert Coetzee – Founder of the Wealth Masters ClubJohannes Maree – CEO, Destinata Group of CompaniesAnnemarie Schutte – MD, Treasury Trust Services

Register for this free webinar here:

TUHF | Paul Jackson | Building a billion rand business

TUHF | Paul Jackson | Building a billion rand business

CEO of TUHF Paul Jackson does not come across as a tardy property financier. TUHF was publicly censured recently by the JSE as a result of its failure to comply with a number of important provisions of the JSE Debt Listings Requirements. The late publication of information relevant to its bondholders, including that its credit rating had been downgraded was highlighted in the censure. Jackson does not deny or ignore the action taken by the JSE censure, in fact he openly takes the criticism seriously and says while warranted, it was unfortunate.

READ MORE: Growthpoint, Feenstra Group & Investors | new student accommodation fund

Jackson confronts his challenges directly and admits that over the years that dealing with company obligations of compliancy, liquidity issues, good relationships and keeping the company funded properly is an essential part and parcel of the business. During the pandemic, TUHF’s rating was downgraded and at the time, missed their specified SENS timelines. Throughout the hard lockdown, they continued to meet with their funders and investors and ensured that securitisation was in place and continually reported monthly on the progress of the finances. Despite these setbacks Jackson’socus is to rather avoid this happening again.

READ MORE: PayProp | Empowering Rental Agents through PropTech


SUBSCRIBE: to our content here 

Sable International launches new offshore real estate investment division

Sable International launches new offshore real estate investment division

Sable International, specialists in financial and immigration services for businesses and individuals, is pleased to announce the launch of our newly established Offshore Real Estate Investment division.

Effective 01 February 2022, the unique offering, which compliments the firm’s already comprehensive nationality, wealth management, accounting, tax, and international money transfers services, provides a bespoke service to businesses and private clients looking to invest overseas.

The division will be spearheaded by newly appointed Business Director Megan Copley, who brings to the firm extensive expertise in the global real estate sector, having worked in real estate investment around the world on leading developments in Europe, the Indian Ocean, Caribbean, and the UK.

Her specialty lies in offering real estate advice to investors looking to grow or diversify their property portfolios. This, coupled with her extensive knowledge of property markets outside of South Africa, delivers a wealth of knowledge to assist Sable International clients in making the right real estate investment decisions, according to their specific needs and aspirations.

Commenting on the launch, Andrew Rissik, Managing Director of Sable International, says: “With the growing demand for property outside of South Africa, this is a positive step for both existing and new clients, as well as for our business as a whole. Together with Megan, we intend to build a real estate division that offers a uniquely client-focused service dedicated to advising clients on their real estate investment options abroad; providing the right solutions according to their wealth ambitions and risk profile, and in a country best suited to each individual’s needs.”

Megan Copley adds: “This is an exciting development for Sable International and I am delighted to join the firm in offering what will be a personal contact service to all our clients.

“Contrary to opinion, real estate investment outside of South Africa truly is attainable. With a strong and well-considered property investment abroad, clients can not only grow their wealth through capital appreciation of the asset, but also hedge their currency in Euros, Pounds or Dollars – and, in many cases, take a mortgage out at a very low interest rate or have a passive income via a rental investment. This is a tangible investment and the nature of buying a house makes it more comprehendible than some financial investments.

“Using my extensive knowledge of the international real estate sector, I aim to assist individuals and families in the planning of their real estate investment ambitions, helping them make the right investment decisions now and for the future.”

Sable International will take care of each aspect in the transactions, delivering a full service from foreign exchange to tax advice. This is unique in the marketplace and truly offers a plethora of services under one roof, proactively walking clients through the process and helping them make the most considered decisions each step of the way.

Andrew Rissik concludes: “By advising clients through the complexities of foreign investment and offering the optimum blend of experience, skills and communication, we ensure that when our clients decide to move overseas, invest offshore or expand their business internationally, they do so with the backing of experienced experts who offer advice and support to complement any wealth strategy.​ We are excited about this next phase in our product development cycle and we welcome Megan to the team.”

Source: Sable International