Gordon's Bay Property Market - 2018 Property Sales Report
It is always good to know what is going on in the property market in terms of price and sales volume trends – be that where you live (prime residential), where you go to on weekends or for holidays or even where you are considering buying an investment property.
The contracting South African economy has during the last few months also negatively affected the Gordon’s Bay property market sales volumes – especially relative to the record sale volumes achieved during 2016. The drop in sales has however been much less than the 40% drop which has been experienced during 2018 along the Cape Town Atlantic Seaboard and other coastal luxury property markets across South Africa.
Gordon’s Bay is the smallest of the three towns within the Helderberg region of Cape Town and has 4 685 freehold properties and 1 719 sectional title properties. The town’s demographics include a population of 11 509 adults with an average household income ranging between R35 000 to R45 000. An interesting shift took place during the last 12 months within the age brackets of the stable owners relative to recent buyers and sellers – possibly pointing to the fact that Gordons Bay offers the biggest choice of entry level or more affordable housing for first time buyers in the region. Only 6% of the “stable owners” are between 18 to 35 years old – whilst more than a 3rd (or 34%) of the recent buyers and only 7% of the recent sellers fall into this age group bracket.
Gordon’s Bay has seen a remarkable growth in property sales volume during period 2009 to 2016 – achieving 217% more sales in the 7 year period, rising from about 22 properties sold per month (267 per year) in 2009 to 48 properties sold monthly (580 p.a.) during 2016. Sales dropped by 1,7% per month during 2017 to 47,5 properties sold per month (570 p.a.) and for the first 8 months of 2018 with a further 19% to 38,4 sold p.m. (346 sales from January 2018 to August 2018).
The most remarkable fact relative to other areas is that, despite the contraction of the Gordon’s Bay property market sales volume during 2018, capital growth, measured by the rise in median prices achieved, has been positive.
Sectional title property prices increased from R550 000 to R580 000, freehold property (houses) from R1,29 million to R1,35 million and vacant land (erven) from R400 000 to R530 000 – a rise of 32,5% within a year. Capital growth achieved for freehold properties (homes) between 2009 and 2017 was 79,16% or 9,89% per year.
Another noteworthy fact is that the oversupply of sectional title apartments, after the bubble-like surge in developments between especially 2007 and 2008, has been absorbed during the last 9 years. Sale volumes of sectional title units has been gradually increasing during the last 4 years – up from 12 units per month in 2014 to 17,6 p.m. during 2018. Median prices has also increased from R475 000 (2015) to R580 000 (August 2018) which is an increase of 22% (5,8% per year) – a vast improvement in comparison to the negative capital growth pattern, due to the oversupply, which affected the property market negatively between 2008 and 2012 – resulting in median prices dropping from R610 000 to R372 000. During this period the surge in sales in execution created a negative price growth pattern with executions rising from 9 units in 2005 to respectively 74 and 78 units per year in 2009 and 2010. This pattern has been dramatically reversed during the last 4 years – dropping to only 6 sales in execution during 2018.
A price range analysis of Gordon’s Bay property sales reveals that the majority of the freehold homes sales (including those build in estates and excluding vacant erven), took place in the price range of R800 000 to R1,5 million – 121 transactions during the last 12 months (October 2017 – September 2018). The 2nd most active market segment was between R1,5 million to R3 million with 76 sales whilst there was only 31 sales in the price range of more than R3 million at an average of R4,737 million in estates and R4,112 million outside of estates.
In the sectional title market 93 units got sold in the last 12 months between R400 000 and R800 000 – which is 54% of the total apartment market sales. The other sales volumes achieved during the last 12 months were respectively 44 units (R0 – R400 000), 25 units (R800 000 – R1,5 million), 13 between R1,5 million and R3 million and only 1 for more than R3 million.
83 Residential vacant land (erven) sold in the last 12 months – of which 4 were inside an estate and sold for an average of R381 000. The other 79 pieces of vacant land (erven outside of estates) sold for an average price of R639 000.
The Helderberg area and specifically Gordons Bay has shown during the last year a capacity to withstand negative external market forces much better than most comparative areas in South Africa. Vacant erven prices which has jumped with 32,5% within the last year just confirms the strong demand for well-located freehold property within especially the house market below R3 million - as speculators, as well as buyers who are opting to buy & build themselves, drove up the erven prices.
If you are looking to buy or sell a property in Gordon’s Bay, please contact one of our local residential estate agents to assist you.
CCH (Cape Coastal Homes) estate agents has during the last 8 months held a 12,8% market share of the Gordons Bay property market (with 40 property sales) – literally the equivalent of every 8th property sale in the town.