August 2020 | Property Update | Cape St Francis

Sunrise view from the Irma Booysen Floral Reserve, Cape St Francis.

Dear valued client,

Analysing the sales for the year 2020 to date, confirms that it has been a slow year thus far compared to 2019, which saw Seal Point Estates do its highest turnover since its inception in 1980. Of course, this is a half-truth as these figures have not been adjusted for inflation. When we compare 2019 to some of the best years in living memory, nothing comes close to the property boom of the early 2000’s, we can still dream right?! None the less, 2019 had been a great year, the proof is in the pudding (I was told as a youngster) and our strong relationships within the village turned into leads and thus, a second-generation family business continued to thrive. We are extremely grateful to everyone who has supported us and the friendships that have flourished over the years. Thank you for trusting us with your investment in the village.

Fast forward to 2020 amidst the peak of a global pandemic. Goals have been postponed, discarded, and completely reimagined. As a business owner in a tourist destination it has been nothing short of terrifying. We are learning to adapt as we go along, firmly focused on December 2020 which will be a watershed for many businesses along the coast who depend on the summer trade to sustain them. As a side note, the tourism sector in SA has been one of the only sectors in our economy to show sustainable growth in recent years, it is now one of the most ravaged by COVID-19.

At the close of the summer season in 2019 and with 2020 in our sights the only medium-term issue was the looming sovereign downgrade, it was inevitable, bringing along with it a devaluation of the Rand and perhaps some cooling of the property market in Cape St Francis. Nothing out of the ordinary then! Early February we took some time off to recharge, at this stage the then named “Wuhan-China-Virus”, was still a curiosity and not a concern. Sitting around a fire in the middle of the Baviaanskloof Mega Reserve with no cell phone reception, we speculated about this strange phenomenon. What a surreal time that will be remembered as.

Winter sunset looking west towards Oyster Bay, with pristine coastal fynbos in the foreground.

So, herewith my thorough market synopsis to arm you with factual information and not the usual estate agent talk of: “interest rates being the lowest in 47 years, it’s a buyers’ market, etc”… this is the market in our village as we are experiencing it. In these turbulent times you may find this information useful.

As we entered lockdown, buying and selling property was the last thing on anyone’s mind. We delayed listings until some clarity was to emerge from the Covid-19 fog. By the time we hit stage 4, inquiries started picking up and we decided to list two homes for under R2.1million, both subsequently sold. Thus far we have had 6 sales since lockdown (3 of them registered at the time of writing). Sellers have been firm with their negotiations, in case you were wondering, no COVID deals in Cape St Francis!

Analysing the sales of 2020 thus far, excluding sales during lockdown which haven’t registered, (lodging and registration at the deed office, bond registration as well as cancellation are taking much longer, with 50% staffing capacity at the big institutions as well as backlogs), the facts for the year are as follows:

January 2020 to present:

Plots Lowest value: R450k

Highest Value: R1.6mil

Houses Lowest value: R1.375mil

Highest value: R4.5mil

Developed properties sold:

House sales over R2.7mil: 1

House sales between R2mil and R2.7mil: 5

House sales under R2mil: 3 (entry level homes)

The most glaring fact of this analysis are the lack of sales in the high-end segment. In 2019 the highest sale recorded in Cape St Francis was R6.5mil. This year so far, only 1 sale over R2.7mil in the whole of Cape St Francis since the start of 2020.

The trend of a record number of listings in the R4.5mil+ category continues from 2019 and 2018. The value propositions of these high-end properties when compared to the cost of purchasing a prime location and building a substantial home, remain excellent. The only conclusion is that there are not many buyers in that price bracket. Competition between listings in this category will likely become challenging for sellers as many of them have been on the market for well over a year.

The numbers confirm the sentiments we have been experiencing on the ground. Sales of properties under R2.5mil will remain the most buoyant, as we’ve seen since lockdown (all sales since lockdown have been under R2.5mil). This is the affordable sector of our village’s property market and caters to a broad segment of buyers. As we go up in price, the number of potential buyers decrease exponentially. Over the years Cape St Francis has only seen a handful of sales over the R6.5mil mark, unfortunately in the current environment it seems unlikely to pick up.

Sales of vacant land have also seen a slow-down in volume, with a few buyers commenting on the “stale-stock” on offer. We attribute the reason for this to the value on offer when purchasing a pre-owned home for R2.5mil or less. On a positive note we have observed a demand for vacant stands with attractive features, either sea views, privacy, nature reserve frontage or a combination thereof.

With 40 years’ experience in the Cape St Francis property market, for expert advice chat to us regarding your property requirements, we are here to assist you.

Keep well and stay safe,

Jal