Sales Slightly Down in First Quarter

A brake appears to have been put on the buoyant Plettenberg Bay property market of the past two years.

From a peak in the second quarter of 2021, which saw 280 sales registered, and another blip during the second quarter of 2022, with 267 sales, the number of sales for the first quarter of 2023 shows a drop to 145.

Sales registered for the first quarter of 2023 were down 42% compared to the sales registered during the first quarter of 2022.

*Low sales due to Covid Lockdown

However, the market is still ahead of its worst performing quarter, in the first quarter of 2020, when 107 sales were recorded. Helen Ward, Principal of Helen Melon Properties says while there appears to be a slowdown "I don't think the bubble has burst". She ascribed the lower sales to a number of factors, which are not exclusive to Plett but apply to the rest of the country as well.

The factors include:

• Higher interest rates, spurred by inflation;
• Pre-election jitters - historically the property market cools when there are elections looming (South Africa goes to the polls in 2024);
• An increase in emigration fuelled by political uncertainty;
• The effect Eskom and blackouts have on the country's economy;
• The general economic slow-down.

"Nationally sales have dropped, and the trend towards first-time property owners has not slowed down. Stands and lower-priced entry level properties still appear to be in demand," says Ward. An interesting statistic from recently published property sales by the Deeds Office for the first quarter of 2023 shows that "entry level" house prices (now seen as between R3m and R5m) still seems to be bouyant. There were 12 sales in the R4m to R5m bracket showing an 20% increase on the 1^st quarter of 2022. The R4m -R5M bracket was the only price bracket which showed an increase in the volume of sales compared to the first quarter of 2022.  

This is probably linked to the "semigration" trend where out-of-province homebuyers, mostly from Gauteng, are prepared to pay the higher entry level prices for homes - in exchange for living in a more "lifetsyle-friendly" environment like Plett. This could also be why Plett prices appear to be higher than other markets.

Locally, some of the elements affecting the Plett market include reduced stock availability, an increase in house prices, and the higher price expectation of sellers. The reason for this could be the near saturation of lifestyle estates, like Schoongezicht, Brackenridge and, more recently, Barons View.  As far as Barons View is concerned, the past year has seen an unprecedented demand for stands - and a building boom has taken place in the estate during the past nine months.

Of interest, the top 5 selling suburbs comprised of 56% of total sales in Bitou.