By Richard Arderne
Deeds Office transfers data shows a 26% decrease in the value of property sales turnover in St Francis Bay (including the Links and Cape St Francis) for the calendar year 2023 as compared with 2022.
This is a substantial drop after the very buoyant sales in the second half of 2020, 2021, and 2022 and the start of 2023.
Interestingly, the drop was virtually the same for St Francis Bay and Cape St Francis.
Growth Rate
The South African coastal house price growth rate peaked in late 2022 and has slowed since then.
This does not necessarily mean that prices have dropped. Still, it does mean that the amazing COVID and post-COVID sales volume along the coast has slowed substantially, along with most other South African coastal towns. Property sales tend to move in cycles, often linked to interest rates, so this is no big surprise.
The slowdown accelerated in the second half of last year when we noticed the low number of transfers registered in the monthly Deeds Office reports.
St Francis Covid Property Boom
This has led to the typical post-boom disconnect between sellers’ expectations and buyers’ demand. Sellers might need to decide whether they need to sell in this softening demand or consider pricing in line with what buyers are currently prepared to pay.
As is well known, property prices have increased substantially in St Francis over the last few years due to increased demand and building costs.
For example, entry-level Links plots have doubled from around R350,000 to about R700,000. Village houses used to be all under R4m, and now many are over R4m. If you can find an entry-level canal plot, it has doubled from about R1.8m to about R3.5m. Prime Santareme houses have doubled from around R6m to about R12m. Cape St Francis has very little on the market.
New Developments
It should be noted that new developments, such as Homestead Views Security Estate, have a longer lead time between sale and transfer due to the home still needing to be built, which can contribute to a lower volume of Deeds Office transfers in the short term.
Also, please note that we are not expecting a slump at all. St Francis remains very popular, and especially with the prospects of the beach restoration, we expect conditions, at a minimum, to be better than in the pre-COVID years.
Surprisingly, despite this downturn, there has been decent demand at the very top end of the market. So far, there have only been three sales ever over R20m: one in 2008, one in 2015, and one in 2023 … but we expect that there will be more in 2024!
The drop in demand has been more pronounced in the market below R10m.
PS Some rain to fill the Mpofu Dam would be most welcome and might even improve buyer sentiment!
See also: We Have Short Memories
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