A survey based on all Hermanus area residential property sales in 2005 and 2006 (but excluding sales of vacant land plots in new developments and excluding properties priced over R10 million) has revealed that although the number of sales in the Hermanus district dropped by some 26% last year, the annual growth in sales prices was 17,65%, which is over 2% higher than the national average of 15,2%, as calculated by ABSA.
The survey was undertaken by Piet Louw, Managing Director of Rawson Properties Hermanus franchise.
'While the figures quoted could have been anticipated because Hermanus has always been a prime property investment territory,' said Louw, 'it should be noted that the price performances of the more expensive properties might come as a surprise to the less well informed. The increases here were in general far lower than those in the more affordable middle range areas.
'For example, in the always prestigious Eastern Suburbs, where the median price is now R2,2 million, the values increased by only 10% - and in Vo«lklip, where the median price is now R1,65 million, the increase is only 5,3%.
'By contrast, in Sandbaai and Onrus median prices rose 35% to between R785,000 and R1,150,000, while in Vermont a real blossoming took place. This is now the place to be with a new median value of R1,320,000, which is an amazing 45,3% up on the 2005 average'
His figures, added Louw, show quite clearly that right now the top range properties are experiencing either no growth or negative growth. At Eastcliff, for example, prices above R2 million fell by 2% and in all categories there was an overall decline of 4,7%. In Vo«lklip homes in the R1,5 million to R2,5 million category fell by 7%. Even in the increasingly popular Onrus and Vermont areas already mentioned, sales prices of homes above R1,5 million were 20% down on last year.
'All the spectacular real growth,' said Louw, 'is therefore quite clearly taking place in the lower price brackets'
Louw said that slower sales at the top end of the market can be at least partially attributed to unrealistic expectations based on dinner table, braai, bar and beach conversations which seldom take into account the real facts.
'While the sales price graph has rounded off, the 'expectation graph' has continued to rise skywards,' he said, 'and regrettably these unreal expectations have been encouraged by certain agents who even now remain virtually ignorant of the trends'
In the longer term, added Louw, Hermanus homes will always outperform most South African residential properties - for the simple reason that, although this stretch of coastline is recognised as being one of the four or five top holiday and retirement areas in South Africa, property here, especially coastal property, will become increasingly scarce.
This scarcity, Louw added, will be exacerbated by the new coastal development legislation that is designed to preserve coastal precincts considered scenically beautiful and/or ecologically sensitive.
Interestingly, although Louws survey excluded new developments, price rises on these, particularly those surrounding the Hermanus golf course (where the last nine of what will be 27 holes will be playable by June) have seen an amazing rise of up to 400% since 2004.
'You have to bear in mind what I have already indicated,' said Louw, 'and that is that long term there can be no better property investment than Hermanus - because of the chronic shortage of prime coastal homes.
