The lure of coastal property here to stay for now
Category From the Chairman
One would have thought that a coastal property market such as Plettenberg Bay would have experienced a notable decline since the onset of the Covid-19 Pandemic as coastal areas are usually the first to feel the pinch when the economy declines. The reality has, however, proven quite the opposite.
Generally speaking, coastal areas have emerged as property hot spots, driven predominantly by the desire for a better lifestyle, especially the towns of the Garden Route. The emergence of Zoom-towns - named after the Zoom meetings application which enables people to remain in contact in a face-to-face digital environment from any location in the world - has meant that people could move, either permanently or temporary, to more desirable locations, yet still remain fully economically active.
Plettenberg Bay is an ideal Zoom-town for a variety of buyers, from second or holiday homes to investment property for the rental market as well as retirement buyers. Many people took the opportunity to slip away to the coast during the various lockdown phases because it is far more enjoyable to stay in at the coast compared to the cities.
We have seen that contrary to expectation, coastal property markets have generally held up well and many areas have seen a strong come-back from the 2020-hard lockdown period when the market practically came to a standstill.
Sales activity has not only surprised on the upside, but we have even seen high value sales. Seeff for example sold the same luxury home twice during the last year, first for R55 million and then for R60 million, both instances raising the price ceiling in terms of the highest price ever achieved in Plettenberg Bay.
As we approach the annual holiday season, Plettenberg Bay will once again see holiday makers flock to the town to enjoy the spectacular weather, beaches and water sport and other amenities. It is a fantastic coastal location with good infrastructure with everything that you need in a coastal town including schools. The close proximity to George and other Garden Route towns further add to the excellent value proposition.
The property market remains in positive territory and despite the pressure on the interest rate, we expect the prime rate to only climb to around 7.5% by the end of 2022 which will still be a historically low level. The interest rate and positive bank lending conditions which are still at the best level since 2007, continue to be a great support for the market.
The market remains largely characterised by good stock levels and excellent opportunities for sellers and buyers alike. Sellers will, however, need to continue pricing in line with current market trends or they could risk not attracting a buyer.
While the expectation is that 2022 should be another positive year for the market. That said, despite the progress made with vaccination programmes, it remains a time of uncertainty. The market is intrinsically linked to the economy and will naturally remain vulnerable to developments in the broader economic and political environment.
As always, we recommend that sellers and buyers work with a credible local area agent who has the experience and expertise to provide guidance on local market conditions to ensure they make a good investment.
Samuel Seeff
Chairman of the Seeff Property Group
Author: Samuel Seeff, Chairman of the Seeff Property Group
