Property sales in Plett down in 2023
Category Property Sales in Plettenberg Bay
Plett's property market is heading, like the rest of South Africa, for the usual election year headache, when jitters in the market show a slow-down in demand generally.
"The decline in an over-heated market is a reaction to the upcoming election, as well as a shortage of stock of vacant stands. A large volume of vacant stands sold in 2021 and 2022 and supply dried up significantly in 2023" says Helen Ward, principal of Helen Melon Properties. Her remarks follow the release of the annual sales figures from the Deeds Office for Plett at the end of 2023 (at the beginning of the 2024 election year). Comparing the number of sales in the election year of 2019 (470 registered sales) and now 579 registered sales for 2023 highlight the downward trend. Refer to sales graph below.
Note that in 2020 there was only 8 months of trading due to Covid lockdown.
Annual sales figures for 2023 paint a picture of the market in Plett putting on the brakes with a decline for the year an average 38% over all price categories. The figures indicated that only the high-end of the Plett market performed well, with 23 sales. The year-end value of property sales is up mainly due to high-end value property sales, in excess of R25m.
One such property was sold for R52,5m in Upper Central (The Square- which is commercial) another for R50m (Edenview Lifestyle Estate- development ) in Bitou rural , another Bitou rural site sold for R34.5m and a house in Lower Central for R29.6m. The total value of the 23 properties sold in the price range above R15 m was R552,820m.
Sales in excess of R15m were bouyant in exclusive beach front access properties in Beachy Head, Duin en See and Whale Rock Beach-end, with the highest price recorded of R23m.
In the "normal" residential market, Deed Office statistics show, there was a decline in most price categories.
- Sales for properties under R1m (this mainly represents sales of vacant stands) were down 64%. The drop reflects the smaller pool of properties available in this category.
- In the R1m-R2m bracket the market was lower by 47% due to reduced stock availability. The pressure on price in this category, and other higher categories, are due to inflation, but are also demand-driven.
- In the R3m-R4m, R5m-R7m and R7m-R10m, there has been a decline in the number of sales in the past year by 21,4%, 28,5% and 20% respectively.
When comparing suburbs it is interesting to note the 2023 year-end figures compared to the 2022 year-end figures: Brackenridge down by 25%; Baron's View down by 64%; The Hill down by 76%; Bowtie down by 46%; Lower Central down by 64%; Sea Side Longships down by 23% and Keurbooms down by 13%.
- The highest performing suburb in terms of volume of sales was Keurboomstand (with 81 sales). This reflected the fact that Keurbooms has been "discovered" and still has availability of competitivity priced properties.
- Second was Sea-side Longships recording 61 sales (with 26 sales under R3m).
- Third was Whale Rock, with 48 sales - down 50% on the sales of the previous year;
- Farms, 44 sales; and Upper Central , 37 sales (27 of the sales were for under R3m).
All the above trends and statistics point to a national trend, expressed by experts giving the following reasons for the slow-down.
- The semigration trend to coastal towns is slowing down in South Africa providing less support to high-end property demand in coastal towns. Returning expats are giving a welcome boost to the luxury property markets.
- The shift in the national property market from buyers to sellers - which also could swing the market from a seller's to a buyer's market as stock availability (especially in Plett) has levelled out and sellers realise their price expectations have reached a limit.
- The massive housing bubble in China, driving over-investment in the residential development sector and a reportedly oversized building construction sector that is "quite alarming" for China and the world economy too. China, as the second-largest economy has a big influence on the global economy's health.
In addition, potential buyers still have to contend with a high interest rate scenario.
According to Lightstone, the 2023 South African market was down 29% on average, but the Lightstone Report showed that 38% of all transactions were first-time buyers, showing an appetite for home ownership is bubbling under.
Author: Helen Melon Properties