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Water is still hot for holiday homes

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But agents report sales in most places across South Africa have gone cold as consumers feel the pressure of rising prices and an ailing economy?.

Across the country, markets for holiday homes are feeling the pressure of slow economic growth and political instability as people cut spending amid concern for their financial futures.

Even though there are still areas in Gauteng and outside the province that remain magnets for holiday home buyers from Johannesburg and Pretoria, analysts and estate agents across the country are reporting notable declines in purchaces of this type. 

The recent FNB Holiday Town House Price Index has seen its growth “starting to lose momentum from a relative revised high of 6.4% year-on-year in the third quarter of 2016 to 4.8% by the second quarter of 2017,” says FNB’s household and property sector strategist John Loos. Even though this growth remains a “reasonable rate” in a weak economy, this translates into a shift to negative real growth considering it is now below consumer price inflation.

“It is realistic to expect slower holiday town markets – possibly under-performing the more primary residence-driven major metro regions, given that a tighter economy will probably drive the emergence of more conservative households. In such an environment, non-essential home buying such as holiday homes becomes less of a priority.”

Despite this general trend nationally, Phil Medlock, Pam Golding Properties area principal in the Vaal dam area and Parys, Deneysville and Sasolburg, says he has not seen any decrease in the purchase of second or weekend homes so far this year. 

This is particularly the case for lifestyle areas such as Parys and the Vaal Dam. Purchasers here are generally from the greater Johannesburg areas, within a 90-minute drive from home.

“A lot of these buyers are using their second homes for longer periods and not just for weekends – Friday afternoon to Sunday – but extending into the week. Most buyers are professionals, or have their own businesses, so are not bound by fixed office hours and can conduct their business electronically. 

“In a lot of cases these weekend or holiday homes become their primary homes.”

Prices of these properties vary vastly with some homes in towns and others in golf estates. In most cases, security is not a major issue as platteland towns are generally safer than big towns and cities.

“A lock-up-and-go property does not have to be in a security estate or complex. Prices range from R600 000 to R1.2 million in towns and R1.6m and upwards in waterfront complexes on the Vaal Dam or River,” Medlock says.

Other agents say they are seeing a decline in holiday home purchases, with Agnesia Geyer, area specialist in the Vaal River region for Lew Geffen Sotheby’s International Realty, saying the market is “definitely slower” this year with fewer inquiries but higher buyer expectations. 

This is because those who can still afford to purchase second homes are well-informed and they research available properties before contacting agents. 

“They aim to get maximum value for their rands and because the market is very well stocked, buyers have a wide choice,” Geyer says.

“The Vaal River area – Vanderbijlpark/Sasolburg – has always been sought after due to its proximity to Joburg and Pretoria. It is a 45-minute drive from Joburg and offers outdoor enthusiasts many activities, from water sports, river cruises, fishing and bird-watching to golf and mountain biking.”
Geyer says the Vaal Triangle is not overpriced, like many other destinations, so visitors can afford to enjoy all the restaurants and cocktail bars and “shop to their heart’s content”. 

“Due to the Vaal’s convenient location, it is also possible to drive to one of the smaller towns like Parys or Frankfort for a more rustic experience, visiting all the antique shops and corner cafes.”

She says most buyers are from Gauteng and are buying for their own use rather than as investment properties. Sectional title properties are preferred as they promise safety, established facilities, minimum maintenance and lock-up-and-go convenience for weekend getaways. 

“Some estates even include boat launching in the levy,” Geyer says. 

Sandton residents in particular are known for owning holiday homes all over the country. Elaine Wilson, branch manager at Soukop Property Group in Lonehill, says their most favoured destination currently is the Western Cape.

“A lot of our sellers are relocating to the Cape or buying second homes there for their holiday use. These properties will also become their retirement homes.

“The consumer today is very aware of the monthly costs of utilities and maintenance to keep the holiday home going due to the present state of the economy. There are, however, still a few people buying holiday homes in estates in the Hartbeespoort, Dullstroom and Clarens areas of the country.”

Although not in Gauteng, the Hartbeespoort Dam area in North-West is very popular with Joburg holiday home buyers, agrees Erika van der Westhuizen, Pam Golding Properties area principal in the area. 

“We still have a combination of purchasers, both investment and holiday homes. However, the market slows down drastically during winter and will pick up again as soon as the seasons change. The secure estates around the dam are most in demand as people seek secure lifestyles.”

Of these buyers Van der Westhuizen says very few are international. Most buyers are local and mainly from Pretoria, Joburg, and Rustenburg.

“We also have a fair number of people relocating from other areas. Most of them buy for themselves and not to let.”
Prices for properties to be used as holiday homes in Hartbeespoort range from R1m to upwards of R6m, says Peta-Ann McBean, Hartbeespoort area specialist for Lew Geffen Sotheby’s International Realty. 

She agrees that even here there has been a decrease in the number of holiday home purchases for weekend getaways. However, there has been an increase in the number of people who buy permanent homes in the area.

The newer security estates which surround the dam are popular with buyers looking to purchase holiday homes. 

They are secure and low maintenance with lock-up-and-go convenience.

“We have a large number of Gauteng buyers but also many from Botswana who buy second homes so they can spend time with their children who attend boarding school at Pecanwood College.”

McBean says most buyers of holiday homes in Hartbeespoort do so for personal use.

Beautiful houses on the banks of the Vaal Dam. The area is close to Joburg and has much to offer visitors and residents. Picture: Paballo Thekiso

This three-bedroom, two-bathroom home in the Pecanwood Estate in Hartbeespoort has enormous holiday home potential. Picture: Pam Golding Properties

This four-bedroom home on the waterfront in the Lakeland is in an exclusive estate teeming with wildlife, has private boat mooring, an outdoor entertainment area and lock-up-and-go convenience. Picture: Lew Geffen Sotheby’s International Realty

Hartbeespoort Dam in North West is popular with holiday home buyers who live in Joburg. Picture: Nokuthula Mbatha

Markets are feeling ­the pressure of political instability
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