Is Now The Time To Buy That Second Home At The Coast?

Many South Africans are busy concluding second leases for the December/January trek to the coast. But if we’re currently in a buyer’s market, is this a good time to buy your very own second home?

It’s never been easier to buy a shared holiday home with family or friends, as FNB now offers a collective-buying home-loan scheme for up to 12 people. It’s a great opportunity to spread your risk and acquire an asset you can build memories in and might not have been able to afford otherwise.

Whether you buy outright, or in a syndicate, there are several factors to take into account when considering the purchase of a second home now, says Paul Stevens, CEO of Just Property, which has franchises in many coastal second towns.

Be aware that these locations have experienced a bit of a property boom during the pandemic. City executives who have used the opportunity to work remotely in a less frenetic environment, enjoy more family time and the lifestyle these places offer.

The increased demand for properties in coastal towns is starting to create an environment of stock shortages. As supply drops and demand continues, you may well find that the “buyer’s market” has already switched to a seller’s market, Stevens warns.

That said, remote working is likely to be with us in some form going forward and the current demand for sale and rental should persist. Buying the right property in one of these attractive towns could prove a sound investment, especially while interest rates remain so low, says Stevens. 

Where should one be looking?

• St Francis Bay and Cape St Francis

  
  

The festive/holiday season at St Francis is hard to beat with a fantastic atmosphere and loads of activities. It has certainly become one of the most desirable places to have a base for families to reunite and holiday together. But it has now attracted many remote workers too. “You can’t put a price on living in a small village and having the best quality of life,” says Shareen Combe of Just Property St Francis Bay. “People realised the importance of this during lockdown and discovered that working remotely is totally doable and a very attractive option.”

As a result, Shareen has seen a real shortage of stock and rising prices in St Francis, “but there is still the odd bargain to be found and huge demand for short- and long-term rentals,” she says. “Tenants are even prepared to move out of the home during peak season to allow for the owners to benefit from holiday rates.”

“Having a second home here will guarantee that your family will always come together at least once a year, no matter where they live,” she says. And during the rest of the year, your property can pay its way with rentals.

• Mossel Bay

  
  

Approximately halfway between Cape Town and Gqeberha lies a large-ish, small town that many may have overlooked in the past. But a stable municipality, good economic growth, relatively safe environment and easy access to the joys of the Garden Route has turned many eyes towards Mossel Bay during lockdown.

Cobus van den Berg of Just Property Mossel Bay says that just 12 months ago, one could buy 3-bed, 2-bath, double garage, full-title properties for between R1,8- and R2-million. “Now you can hardly find one under R 2.2-million,” he says, noting that the first stock shortages are becoming apparent, especially in the “second hand” property sector.

The interest in Mossel Bay and the municipality’s strong marketing of the town has attracted developers too. “There are quite a lot of new lifestyle estates and duet-housing developments in and around Mossel Bay and this is where there is still value to be found,” says Cobus.

Contractors working for Petro SA, Transnet etc. form a ready base of tenants, so renting out a second house is not difficult. “These contractors spend the year in Mossel Bay but prefer to go home to their families during December, so the owner can then use his property for the holiday season.”

• The West Coast

  
  

The “Weskus” is beautiful, politically stable, safe, and everything works. It is a tapestry of small areas, each unique in its offerings, says Gys Grieshaber of Just Property Weskus. In some places, vacant land is extremely expensive and rare, while in another village it might still be in abundance, with very good value on offer. For most segments stock levels are still quite good.

“We have recently seen an upwards trend specifically with vacant land near the sea. The oversupply created during the property bubble of a decade and a half ago has now been absorbed into the market and will soon be a thing of the past,” he adds. For value, look to areas like St. Helena Bay, which has lots to offer for prices comparable to inland towns. “This is bound to change soon as stock levels decrease,” Gys warns.

In terms of the rental market, he reports that there are very low vacancies and a high return of investment if you buy in the right segment.

“Holiday accommodation can also be a very lucrative revenue stream, especially so in the coastal settlements. This gives you the flexibility of utilising your holiday home as frequently as you wish, while still realising good returns in the times you are elsewhere.