BUYING PROPERTY IN COASTAL ESTATES

Jan 17, 2018 | Property Investment

Buying property in a coastal estate is proving to be not only an appealing lifestyle choice but also a smart investment.
South Africa has a rich, diverse coastline, with long white beaches, beautiful estuaries and lagoons, rugged shores, fynbos, forests and more. Owning a place by the sea is a dream for many, but security remains a top priority for homebuyers, so coastal estates have become a sought-after option. According to property analytics company Lightstone, coastal property prices have risen by an average of 6.6% for the period January to July 2017, whereas non-coastal property prices have increased by an average of 4.1%. Lightstone defines coastal properties as being within 500 m of the coastline. During the second quarter, Lightstone indicates that coastal prices are rising nearly 3% faster than non-coastal prices compared with year-earlier levels. Lightstone has also shown that security estate property values tend to be less volatile and hence a better investment option than freehold during challenging economic times. There is a shift away from traditional golf estates to developments with a range of activities, retirement villages and eco estates.
The semigration trend that has helped to bolster property prices in the Western Cape has contributed to the desirability of property along the coast in this province, with many Gauteng buyers favouring estate living, says Sandra Gordon, research analyst at Pam Golding Properties. Many buyers are looking for developments that combine functionality with quality of lifestyle. They want the peace of mind that living in a secure estate or complex brings, but they also want to be close to nature and the lifestyle attractions that the coast offers.

CAPE WEST COAST

Picturesque Yzerfontein is buzzing with building activity as more families are moving to this village on the West Coast. “With the availability of bus routes to the Curro Langebaan and Darling College independent schools nearby, a growing number of families are choosing to settle in Yzerfontein to take advantage of the coastal lifestyle,” say Sheena Nutter and Ilona du Toit, Pam Golding Properties agents for Yzerfontein and Darling. Ilona says buyers want to live in a community that offers their children the opportunity to experience an alternative lifestyle to city living, without being too far from the amenities in Cape Town.

“People want to live near to where they work, play and shop,” Sandra says. “In some areas, this translates into estate living where families can make full use of an array of amenities in a safe environment. Residential estates also offer a sound investment in terms of capital appreciation and potential rental income.”
Mile 16 Beach Estate in Yzerfontein offers a seafront-living investment with private beach access and panoramic views of the sea and Table Mountain in the distance. Some homes are fully let at excellent returns for investors, says Chris Tapsell, Mile 16 developer and director of Group3 Properties. “And some owners have opted to Airbnb their homes, which allows for a lot of flexibility for the owner.” Plots in this secure development range from 400 m2 and upwards, and sell for R599 900 to R1.7 million. Three other lifestyle estates on this stretch of the West Coast are the new Langebaan development Shark Bay, Langebaan Country Estate, and Shelley Point, which offers residents a nine-hole golf course and walking trails in a secure estate surrounded by three natural bays.
Jakkalsfontein, a 1 700 ha nature reserve with a 4 km beach, is located just off the R27 between Yzerfontein and Grotto Bay, about an hour’s drive from the city. “Property values have risen by about 40% to 60% over the past five years,” says Seeff agent Cynthia Cousins, “but have now flattened out due to the economic contraction. Prices in Jakkalsfontein estate range from about R4 million to R16.5 million for a fabulous top-end house.
This stretch of the West Coast has rugged, pristine beaches, quaint fishing villages and a rich cultural history. New coastal residential estates can be found alongside nature reserves and protected wildlife areas.

CAPE WHALE COAST

This stretch of coastline on the Atlantic Ocean runs from Rooiels in the west to Quoin Point in the east. The main towns are Kleinmond, Hermanus, Stanford and Gansbaai, with villages, farms, rivers and coves in-between. Nicola Lloyd, Pam Golding Properties area manager for Hermanus, Elgin and Onrus, says the coastal villages of the Whale Coast provide excellent lifestyle and investment choices for locals and for those seeking to relocate to the Cape but who are stymied by the escalating prices of the Cape Metro and surrounding areas. Estates such as Arabella, Benguela Cove, Fernkloof Golf Estate and a few smaller security estates in the Hermanus and Onrus area are extremely popular. The strongest demand for estate properties along the Whale Coast is at the more affordable level (R2 million to R3 million), a price bracket in which stock is scarce. “There are several large developments planned by the private sector in the Hermanus/Onrus area,” Nicola says. At the higher level, Benguela Cove homes are achieving prices of more than R10 million, with large tracts of waterfront and vineyard vacant land listed for between R2.5 million and R4.4 million. The smaller coastal villages of Pringle Bay and Rooiels are within an hour’s drive of Cape Town International Airport. “These villages operate as virtual security estates,” Nicola says; “they have limited entry points that are monitored with cameras and 24-hour armed response. They offer value for money. Top-end coastal properties are available from R6 million upwards, with vacant land starting at R400 000.”

ATLANTIC SEABOARD, CAPE PENINSULA

The jet set are paying top dollar for high-end properties on the Atlantic Seaboard with a view to making big returns. “There is no doubt that waterfront property attracts the highest demand and capital value growth in the country,” says Samuel Seeff, chairman of the Seeff Property Group. “We see this clearly reflected in the 40% to 60% premium paid for these top-end properties on the Atlantic Seaboard.” Property prices here have risen by more than 100% over the past 5 years and by 600% over 15 years, according to an FNB Property Barometer. Gated waterfront estates such as the V&A Marina have attracted some of the highest property values and prices in the country the past 10 years. “The uniqueness of the Atlantic Seaboard is that there’s ultimately a very limited supply, as it’s positioned between the mountain and the sea, leaving no large tracts of land for expansion,” says David Sedgwick, managing director of Horizon Capital Residential. “This natural limitation to the supply offering is a key factor in ensuring long-term capital growth.” Horizon Capital is currently busy with a new development, The Azure in Camps Bay, which offers four bespoke residences with the convenience of being in walking distance of the beach.

GARDEN ROUTE

People semigrate to the Garden Route for its unparalleled lifestyle, natural beauty and quality of life. The George area alone is experiencing an influx of 45 families per month, according to George Municipality. New types of lifestyle estates such as wildlife estates are becoming more financially viable and environmentally sustainable than the original golf estate model, which has until now dominated the lifestyle estate sector in South Africa. A key requirement from investors is security, followed by lifestyle and location. The Brink Eco Estate in Herolds Bay offers easy access to George Airport, just 8 minutes’ drive away, and the George city centre only 15 minutes away. “The Brink Eco Estate has invested in state-of-the-art access control systems, cameras, electric fencing, guarding and patrolling,” says Neil Tucker, principal estate agent at Grip Realty. “Many professionals and business owners commute to Gauteng and elsewhere, and when they leave family behind security is their primary consideration.”

Neil says any existing seafront residential property in South Africa will become more valuable because of the Coastal Management Act and its relevant amendments, pieces of legislation that are aimed at regulating the coastal impact of, among others, development. This includes curtailing “ribbon development” along the coast. “Basically, the act will make it very difficult for coastal land to become residential in nature. And scarcity in property will generally result in an increase in price.”

Fynbosstrand is an exclusive private coastal sea farm share block development between Stilbaai and Gourits River Mouth, about 100 km from George Airport. It extends over about 425 ha of coastline. Great emphasis is placed on environmentally conscious practices. Fynbosstrand company chairman Johan Malherbe says it is a holiday destination without the overcrowding of coastal towns during the holidays. Proteas and reeds are harvested on the property for additional income. Johan says shareholders tend to stay once they’ve invested in Fynbosstrand – in the 27 years of its existence, very few houses have changed hands.

Another sought-after residential security estate is Fernwood, on the slopes of Knysna’s eastern Head. Simola Golf and Country Estate and Pezula Golf Estate in Knysna also offer investment opportunities for the more affluent, as does the 100 ha Whale Rock Ridge near Plettenberg Bay.

KWAZULU-NATAL

Inland buyers are looking at KwaZulu-Natal for investment and lifestyle opportunities, especially in the burgeoning North Coast region, where many are acquiring luxury and super-luxury properties at the top end of the market. Zimbali Coastal Resort is one such estate. It features a 3.5 km stretch of rugged coastline. A large percentage of buyers are from Gauteng and others are relocating from Durban to the North Coast. “With luxury homes being in the price range of R10 million and upwards, the last three-and-a-half-year period has yielded sales in excess of R2.4 billion in Zimbali, with nearly 64% of these being cash sales,” says Seeff Dolphin Coast principal Andreas Wassenaar.

“We have a lot of good reasons to stay in South Africa, and one of them is the expanding coastline of KwaZulu-Natal and the development of the Sibaya Precinct and coastal belt between Durban North and Ballito,” says Carol Reynolds, North Durban area principal for Pam Golding. The 1 000 ha Sibaya Coastal Precinct, with its mix of residential, commercial and retail components, has become the most talked-about development on the North Coast. “Clients can invest in apartment blocks, lifestyle estates, upmarket exclusive estates or retirement villages,” Carol says. “We find wonderful security estates in the Sibaya Precinct, new estates in Umhlanga and a number of more established estates in Ballito.” Sibaya has just secured a top private school to meet the ongoing demand as families move
into the area.

“You can build a golf course almost anywhere, but it’s impossible to re-create living at the coast,” says Blythedale Coastal Estate development director Andrew Thompson. “Walking on the beach with the waves crashing on the shore and looking out over the sea is impossible to fabricate.” Blythedale, which comprises six themed residential estates, “is unique in that inclusionary middle-market housing forms a part of the larger estate,” Andrew says. “With land selling from R650 000 up to R5 million, we have a broad range of price points, which gives us access to diverse market segments.”

There will always be a price premium on coastal property,” Andrew says. There’s a limited supply and the unique aspects are virtually impossible to substitute.”

EASTERN CAPE

Investing in an estate on the Eastern Cape coastline offers a desirable lifestyle but generally at a more affordable price than on the Western Cape coast. Royalston Wildlife Coastal Estate is a 1 000 ha residential nature reserve with more than 1 000 head of free-roaming wild animals and 25 km of hiking and mountain biking trails. “Residents can enjoy the peaceful and healthy outdoor lifestyle that Royalston offers,” says Jared Watson, chairman of the Homeowners Association, “yet it’s only a 20-minute drive from the airport and all urban amenities.”

Royal Alfred Marina is located in the village of Port Alfred, midway between Port Elizabeth and East London. Comprising five islands in a 45 ha private estate in the Kowie River Estuary, it appeals to holiday home and retirement buyers in particular. It is gated and has topclass security. “Property values have grown year-on-year, and the Marina is certainly seen as a good investment,” say Simon Oliver of Seeff. “Prices range from about R3 million at the lower end to about R5.4 million.

Caption pg 55: EASTERN CAPE This part of the country, including the city of Port Elizabeth, offers great quality of life combined with much more affordable property prices than the Western Cape coast. It is known for its diverse wildlife, beautiful beaches and relaxed lifestyle.

Caption pg 49: “A Growing number of families are choosing to settle in Yzerfontein.”

Caption pg 49: CLOCKWISE FROM INSET OPPOSITE Two private schools in the area are attracting homebuyers to Yzerfontein, about 80 km from Cape Town. | Mile 16 Beach Estate stretches from Yzerfontein’s main beach towards the West Coast National Park. It is one of several secure lifestyle estates along the Cape West Coast. | This four-bedroom house in Yzerfontein with views of the Atlantic is on the market for R6.25 million.

TEXT Lauren Groenewald PHOTOGRAPHS Supplied