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trends1CURRENT PROPERTY TRENDS IN CAPE ST FRANCIS :

Emerging from an entrenched buyer’s market

Without a doubt, the Cape St Francis Property market is well into it’s recovery phase, emerging from a very entrenched 7 year ‘’Buyer’s Market’’. This is reflected very well in the substantial property sales in Cape St Francis in the first half of 2016!

The number of property sales per year in Cape St Francis are low if compared with those in neighbouring St Francis. In a record year in the past 10 years, 60+ registered property sales was a notable achievement. What is remarkable about was has taken place so far this this year and in fact for the past 2 years, is the value of the property sales which have taken place.

High end Sales Taking Place :

A record sale of R13 million for a beach front property has been concluded – other sales include a beachfront plot sold for R6 million, another property with dated improvements being sold for R5.5 million. 2 other developed properties, have each being sold for in excess of R4.5 million!

In addition to these sales some major investment is being made into prime property in Cape St Francis with about 10 properties either having had old structures demolished & re-built or a new build on vacant stands or major refurbishment either planned or completed.

The injection of this sort of capital into Cape St Francis is raising the price bar of prime Cape St Francis Properties – and with a world class beach and a limited supply of property – prices are likely to continue to grow at a level which should outstrip inflation.

It is a known investment trend that during periods of economic uncertainty and market volatility, individuals often become more cautious about their investments, which results in property which, although less liquid, provides more stability to an investment portfolio. Research we have done has shown that a well selected property in Cape St Francis has outperformed inflation and has generated a better return than equities.

Middle of the range Sales Remain Slow :

However, despite these high end sales, the general demand for property in Cape St Francis remains muted and slow largely due to this market being a 2nd home market. Other factors that have had a negative influence have been the slow but steady rise in interest rates which has affected affordability plus reluctance of potential buyers to make a decision due to the uncertainty about where interest rates are headed especially due to the sluggish economy and an all-time low consumer confidence.

A Slow Recovery Predicted :

We have certainly come off the lows of 2008 and 2009, but as predicted, the recovery of the property market has been a slow and bumpy road with house price growth (with the exception of Cape Town, the KwaZulu Natal North Coast areas, Soweto & some other pockets) being largely below the inflation rate for most of the past 6 years.

Whilst the market remains sluggish, we are encouraged by the level of listings – with less than 6% of total stock on the market and very few distressed sellers – property prices being achieved have moved closer to the listed prices compared to a couple of years ago. This is due to a combination of sellers being more realistic about listing prices and the slow recovery in the property market.

Availability of Property to Purchase in Cape St Francis :  this remains limited when compared to our cousins, St Francis Bay or to our distant relative, Jeffreys Bay.
There are a limited number of properties in CSF [750] , a factor which is unlikely to change due to the area being surrounded by nature reserve and protected green areas. In addition to this, Cape St Francis tends to be less of a speculative market than St Francis Bay,meaning that owners of property are less willing to sell properties in this area having bought because of an emotional tie to childhood holiday memories or a desire for a particular kind of lifestyle offered by this laid back area.

The successful buyer in Cape St Francis learns that one is unlikely to find the property one wants, in the condition one wants, in the area of Cape St Francis that one wants and at a desirable price. With many rustic type holiday homes, it is wiser to choose the location that appeals and then to be prepared to work with the property that offers this.