South African Coastline Prime Vacation Rental Property Area
If a home is located in a tourist or retirement area, it has a chance of being sold as a vacation rental property or retirement property. Add beach view or beachfront and these properties are starting to move again after the economic tumble of 2008.
As the economy and real estate markets recover and shift, the second home market is making its comeback first. As baby boomers retire and look for less expensive and more synergistic investment and retirement opportunities, they are turning to vacation rental properties that can create income while they await retirement. As another evidence of this growing market, we refer to the Wall Street Journal’s recent article on The Garden Route of South Africa’s Indian Ocean’s Coastline:
“South Africa’s striking 200-mile stretch of southern coastline called the Garden Route lures visitors with its vast white sandy beaches, rain forests, extraordinary flora and fauna, golf courses and artist communities. Now, after taking a financial beating in recent years, it is also once again attracting home buyers.
A steady optimism is starting to emerge among the purchasers of vacation and retirement homes in the area. South Africans are leading the resurgence, but Britons and Germans—long the strongest foreign buying contingents here—are close behind.
“We are seeing more and more international investors returning and a growing number of inquiries from South African buyers, particularly for upmarket homes,” says Ling Dobson, who markets properties for Pam Golding Properties.
Ms. Dobson focuses on properties in Knysna and Plettenberg Bay, the two most popular vacation destinations along the route, which winds between the mountains and the coast of the Indian Ocean, from Heidelberg to Storms River.
The company’s sales in Knysna (pronounced NIGHS-na), a town known for its dramatic cliffs overlooking a beautiful lagoon, its water sports and its oysters, totaled $2.7 million in March and April, compared with $1.4 million in the same period last year. Ms. Dobson recently sold a four-bedroom home on the Pezula private golf estate for $2.3 million. The glass-front home is built on one of the sea cliffs at the entrance to the Knysna lagoon; the buyer, a South African, has views of the Indian Ocean.
Much of the Garden Route is experiencing the housing-market resurgence==particularly from Sedgefield, a sleepy village in the east that attracts retirees, to the increasingly popular western town of Mossel Bay, a destination for golfers and bargain-house hunters. The recovery along the route, however, is uneven. In Knysna, for example, prices are stuck well below their 2008 peak.
“The period after the 2008 peak has been characterized by slow demand and an oversupply of properties for sale,” says Sotheby’s International Realty’s Peter Mare about the Knysna market.
Foreign investment flooded into South Africa during the postapartheid boom years, when the country was settling into its new democracy. International visitors stayed to buy summer vacation homes and that, coupled with local investment, caused property prices to surge. But the global economic crisis turned the country’s healthy 5.5% growth into a 1.5% contraction in two years, and its path to recovery since 2009 has wavered.” (see more in the Wall Street Journal)