Mossel Bay is one of the emerging so-called ‘zoom towns’ enjoying a boom in property sales and rentals.
With remote working becoming commonplace, more people are moving to seaside towns and areas usually considered holiday destinations, and Mossel Bay is coming up tops for coastal living in the Western Cape.
While many parts of that province enjoyed massive growth in house sales in January and February this year, Mossel Bay is one of the emerging so-called ‘zoom towns’ enjoying a boom in property sales and rentals.
Chief executive of BetterBond Carl Coetzee said homeowners, now able to work remotely, are making lifestyle choices when considering where to buy a home.
Quality of life, peace of mind and falling under a municipality that operates efficiently are among the key considerations for buyers wanting to invest in property.
“With interest rates at their lowest in more than 50 years, making it more affordable to apply for a bond for a dream home along the coast, we are seeing more buyers moving away from the cities.
“Mossel Bay ticks many of these boxes. It offers natural beauty in abundance, has a strong sense of community and is one of the best-run municipalities in the country,” said Coetzee.
Rating agency Ratings Afrika has just named Mossel Bay as South Africa’s most financially sustainable municipalities, saying it offers a seaside lifestyle with access to excellent educational opportunities as well as other amenities.
Just Property franchisee for Mossel Bay Cobus van den Berg said he has seen a significant increase in the rand value of deals done in Mossel Bay since the start of 2021, as well as the number of sales.
Indicative of the semi-gration trend is the changing age of recent buyers.
TPN data, which checks rentals, schools and businesses, shows demand has pushed up rental values in both full-title and sectional title properties and rental yields remained solid at just more than 8% and 7% for full title and sectional title properties respectively.
“We attribute this to massive semigration from Gauteng, and we are seeing considerable interest from other provinces in the rental space,” he said.
Van den Berg added that the proposed gas production works also created a pipeline of speculative interest to the area.
While Mossel Bay still offers value for money, the demand for homes since the pandemic broke last year, is causing prices to rise.
A three-bedroom home with a double garage sells for about R1.8 million.
Property24 noted that the average asking price for a Mossel Bay home has inched up from R1.55m to R1.64m this year.
But, most properties sell for around the R1 million mark, according to the portal.
Similar trends are evident in other seaside towns, said Paul Stevens, chief executive at Just Property.
Langebaan also recorded phenomenal growth in value and sales in the first two months of the year.
Rental demand remains high, with the average rental for a full title property at R11 900 towards the end of last year.
Just Property said house and sectional title prices are also steadily increasing in George, which has seen a 59% increase in the rand value of deals concluded during the first few months of the year.
According to Lightstone property data, the price premium between coastal properties and their inland counterparts continues to widen.
In November, coastal properties’ inflation was up 5.5% compared with inland inflation of 3.9%.
Market data pulled for Mossel Bay in the period May 2020 – April 2021 shows:
57% of existing owners have owned for 11 years and more. 22% have owned for less than 5 years
43% of recent sellers have owned for less than 5 years. 38% have owned for more than 11 years
39% of recent buyers are aged 50-65 (mature), 32% are aged 36-49 (middle-aged)
40% of recent sellers are aged 50-65 (mature), 32% are aged 65+ (pensioner)
There were 112 1st time registrations (new developments) and 1 269 repeat sales
Sectional schemes and vacant land have seen positive growth (up 30+% and 9% respectively) year-on-year but freehold property prices have taken a 15% knock
We are currently seeing a divergence between asking price and sale price of 40%
Agents agree that the new trends are probably due to the hype around ‘zoom towns’ and the inevitable optimism from sellers that has followed.
Lightstone said house prices in the North West, Mpumalanga and Eastern Cape have been growing at increasing rates and they now top provincial growth.
The semigration movement is also seeing a reinvigoration of many coastal towns inhabited largely in the past by retirees, and which are now experiencing an influx of younger families who were previously tied logistically to lives in big cities.
Smaller coastal cities such as Port Elizabeth and East London have also seen a surge in sales, with Nelson Mandela Bay taking the spot as the the leading metro currently in the residential housing market.
The experts agree that had Covid-19 happened just a few short years ago, this acceleration to remote working would not have been possible.
But technical advancements in internet connectivity now enable a cyber office environment that will see increasing numbers of people able to choose exactly where they want to live.