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Coastal Property Wins

Serious investors can cash in at the coast

South Africa potential homeowners are in a collective state of depression. The National Credit Act. Which was promulgated in June this year, has scuppered their chances of investing in that dream holiday home in Cape Town or Durban. The property boom is over and they must now be content with homes in Sandton or Savoy, Hurlingham or Houghton.
The good news is these is not exactly the case According to Sakkie Coetzee from Cape town investment Properties, “Tougher circumstances right now in the property market are actually good prospects for investors that are prepared to invest medium to long term,” he says.” The same is net true for speculators that buy and want to sell quickly.” Coetzee explains that because of the lull in the market, serious investors can mow take time to look for good coastal prospects to increase their property portfolio.

According to Coetzee, it will be the speculators providing the opportunities for the investors.” Good prospects might come in the form of speculators who will be forced to sell because they cannot take transfer of the property they bought with the intention to sell at a profit. We have the higher interest rate and the over-development in some areas to thank for this.”
Coetzee agrees that the National Credit Act makes obtaining bonds difficult, but he explains that if you have expendable income, it actually makes it easier.” The serious investor will be able to carry his own bond for a fair length of time, waiting for the good time to come. And then sell at a decent profit. This is especially true for the mew investor.”

Ryan Hamburger from International Realtors believes that the property markets in Cape Town and Durban are stabilising.” We are experiencing a correctional period,” he says. “The lower end of the market seems to be a bit slow because of the National Credit Act, but the upper end of the market doesn’t seem to be affected.”

From what Hamburger infers, and what Coetzee said earlier, it seems as though the serious investors is the big property winner presently and in the ling-term. The lower end of the market can simply not afford to buy coastal property due to the National Act, while the top end is able to cushion the blow and cash in on speculators.

These top-end buyers will continue to invest in experience coastal properties, which Hamburger says vary in price from one area to the next.” Depending on what area you buy in and what you are getting, properties are being bought for up to R40 million.

Hamburger says that commercial property is a popular investment in Cape Town and Durban. “Cape Town prices are higher than in Durban, so you van expect a bigger return on your investment.” He continues to say that foreigners are not only buying residential property in Cape Town but also commercial property. “There not a large portion of ten, but there certainly is foreign investment in Cape Town.”

According to the property market update released earlier this year by FNB Commercial Property Finance, coastal property were expected to underperform compared to the national average, particularly in areas where second homes are popular.”Coastal holiday markets in KwaZulu-Natal and the Eastern Cape are probably a mire important force in the overall formal residential market than economist, John Loos, explains in response to the update.

Loos says the Western Cape gas a far higher per capita income and therefore a far larger formal primary residential market. He expects short-term volatility, but feels the linger-term picture is good. Furthermore, Loos was expecting property prices to increase by 85% between 2005 and 2010, though he mow expects this percentage gain to be closer to 100%.

According to Loos, if you owned a property in 2005, you can expect it to be worth double by the end of the decade. Loos expects gains to be higher than 100% for lower-price houses and less for houses with price tags from R1.5 million.

So the opportunities are still there, bur only for the investor willing to dip more than just a toe into the coastal property market pool.

“A golf course situated on the outside of any town serves an excellent purpose in that it segregates the well to do from the idiot well to do!” Sir Osbert Sitwell

Coastal Property Wins

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