Plett property market takes a knock in first six months.
Category Property Sales in Plettenberg Bay
Four factors responsible for the downturn in the Plettenberg Bay property market in the first six months of this year have been highlighted by Helen Melon Properties.
The factors are:
- Cost of living-related constraints, such as higher interest rates;
- The availability of stock of houses up for sale;
- High price expectations of sellers; and
- The changes of company policies with regard to working remotely.
A recent Nedbank report on household debt burdens reflected that this has risen to 62% of disposable income. Contributing to this increase is the fact that interest rates on borrowed money has risen to its highest level in 14 years, with households throughout South Africa taking strain to match the increased repayments.
Nedbank says the cumulative 475 basis point increase since 2021, introduced to combat inflation, has pushed up debt service costs for individuals to 8,4% of disposable income, making it more difficult for households to maintain living standards.
"The market has been good to us all in Plett. But it is a case of swings and roundabouts passing through various property demand cycles," said Helen Ward, principal of Helen Melon Properties.
"We've now hit a bit of a headwind because of these various factors, like stock availability. Many properties have been sold, but there is not much coming on to the market to satisfy the demand of people wanting to buy in Plettenberg Bay, in certain price brackets," said Ward.
Plett remains a sought-after property destination because of the lifestyle opportunities available to new buyers who have joined the "semigration train" from elsewhere in South Africa.
Ward also points to the fact that there are a record number of property agencies in Plett today - a Property 24 survey showed there were over 50 represented in the town. Pre 2020 there were approximately 10 agencies represented in the town.
The result of this is that sellers are exposed to more agents, many who fall in the category of interns without the necessary experience, qualifications and supervision and will go to any length to secure properties to list. This pressure can contribute to some sellers being convinced of unrealistic expectations.
"Only experienced and established property practitioners such as Helen Melon Properties will be able to provide a realistic indication to property owners, based on current and historical trends, of what a realistic price would be.
"Respected property practitioners can also navigate sellers and buyers seamlessly through the challenges new legislation has put on house transfers," says Ward.
The reality of the Plettenberg Bay market is that in the past six months, according to figures released by the Deeds Office and analysed by Helen Melon Properties, there has been a decline of 44% in the number of property sales, compared with the same period in 2022.
Historically the property sales trend has peaked in the second quarter of the year, but this year that second quarter figure is down, underlining the lower trend.
In 2021 Deeds Office second quarter figures showed there were 280 sales in all price categories of properties. In 2022 the figure was 267, but the second quarter of 2023 recorded only 148 sales.
The percentage change of sales in various price brackets in the first six months of this year make interesting reading.
Traditionally the Plett market has been very active in the lower price bracket below R3m.
However, the high end of the market, in which buyers do not appear to be affected by cost of living constraints,(above R10M) there has been continued activity.
The Top five performing suburbs in the second quarter of 2023 are the ever-popular Keurboomstrand and Sea Side Longships performing well with 37 sales each. Bitou NU (farms) and Upper Central also performed relatively well with 23 sales each. Whale Rock reflected 22 sales.
Author: Helen Melon Properties