What you need to know before investing in North Coast property market

‘Tumultuous’ might be the best way to describe the 2020 property market for the North Coast, but what lies in wait for 2021?

Briefly rewinding to 2020, many expected the property market in South Africa to suffer in the wake of the global Covid-19 pandemic, with contributing factors including a looming downgrade at the time by ratings agency, Moody’s.

Many property people were quietly mouthing the letters D-O-O-M-E-D at the time.

But what happened was increased demand for larger properties – especially those offering a work-from-home environment.

A main contributing factor was the record-low interest rate which saw lower monthly repayments.

Data analyst company, Lightstone recently reported an increase in the numbers of Gauteng residents relocating to the North Coast.

Fast forward to 2021 and it seems this trend is set to continue, especially among first-time home-buyers who are targeting the R1.5-2 million price range, Lightstone reported.

But while their guess may be as good as the next person’s, it remains an educated guess which local agents have weighed in on.

Fiona Crago Real Estate principal, Fiona Crago said they have been inundated with enquiries and sales.

“The expectation for 2021 looks very bright and we are set to go places. Despite the proverbial nonsense of 2020, we’re already adding on last year’s growth,” she said.

While properties around the R3 million mark were the best movers, their top-selling home for 2020 was bought for R6 325 000 with December sales having increased compared to previous years.

Seeff North Coast sales director, Graham White agreed that record low interest rates played a huge role in increasing buying appetite, especially among Gauteng residents.

“This resulted in a year that was far better than anyone expected or even anticipated,” he said, adding that Seeff locally had had a record year. He agreed that buyer activity had increased compared to previous years.

Seeff North Coast’s listed properties changed hands for an average of R3.1 million, while the highest price paid last year was a Salt Rock home for R12 million.

“I foresee a buoyant market continuing into Easter and at least the first half of 2021.”

But where should you invest? More affordable homes are being snapped up fast and the focus is seemingly placed on sectional title schemes – a shift away from typical freehold neighbourhoods toward upcoming developments within the R2million price range.

Why? The resale value in this market is set to remain high owing to the lower price range coupled with the interest rate.

“This trend is already emerging, especially in Salt Rock and Sheffield where some real quality projects have recently become available in Zululami, and Simbithi in particular,” said White.