If people move to George, it is more than likely that they are retiring. If, however, they are making a job change they may often have to take a big cut in their earnings, says Stephen Lubbe, co-franchisee (with his wife Mariaan) for the Rawson Property Group’s George franchise.
“Although this drop in income occurs almost across the board to those who transfer here, I have never yet come across anyone who regretted the change or decided to go back from where he had come from,” said Lubbe recently. “The simple truth, it seems, is that what George can and does offer in lifestyle is seen by most of those who come here as more than compensating for any loss of income.”
In the last year and a half, said Lubbe, there has been a noticeable upswing in the perception that the attractions of George are many – he mentioned, in particular, its low crime rate (a very big draw card), good schools, beautiful mountain and forest scenery, its five or six international standard golf courses, its suitability for all types of outdoor activities (sailing, surfing, fishing, boating, hiking, cycling and running) and its relaxed, friendly community spirit. All of these factors, said Lubbe, are drawing an increasing number of people to the area – 45% of his sales today are now to people from elsewhere in South Africa.
Lubbe added that moving to George can often be done at a relatively low cost, with the mover acquiring a small nest egg in the process because he can frequently buy here for 30 to 40% less than he sold elsewhere.
“George’s image,” said Lubbe, “is sometimes defined by the high prices of such gated estates as Fancourt, where R4 million to R6 million is the going price of the average home. However, the simple truth is that at least 60% of the sectional title units we now sell are priced between R1,1 million to R1,5 million, while, in the freehold market, most of our sales are in the R1,2 million to R1,8 million bracket. These are prices which the vast majority of our buyers find highly acceptable.”
Lubbe added that these prices have, in fact, hardly risen at all in recent years. At one stage (2009 to 2011) they were actually dropping, but have now bottomed out and stabilised at prices which, nevertheless, are ‘highly competitive’ but for the first time in a long while, he is now witnessing an upturn in interest in the more expensive homes in his area. His team has recently sold a home for R3,65 million in Camphersdrift.
“About 25% of our stock is priced above R2 million and I am now more confident that during this year and in 2015 we will see this starting to move,” said Lubbe.
The rental market in George, said Lubbe, is currently outperforming the sales market very significantly – and this is resulting, for the first time in many years, in an influx of buy-to-let investors.
Good sectional title units rents here, he said, have risen in price by roughly 10% over the last year and are now priced mostly between R3,500 to R6,500 per month, while freehold units are renting out at R5,000 to R12,000 per month.
“Obviously,” said Lubbe, “our portfolio can supply more affluent homes for those tenants who can afford them and we have some renting at around R20,000 per month, but the demand here is fairly limited.”
Investors, he added, are often looking for whole complexes of apartments and his franchise can help them to acquire these because he and his team have now become licensed Rawson Commercial franchisees as well as residential franchisees.
“Our most significant recent sale here was for a two block apartment complex, Brydon Court, with some 25 units. The price paid was R5,4 million, which, by any standards, would be considered satisfactory because it will give an annual return of roughly 9,5% on the investment. Although demand in this area is so strong, regrettably there are still relatively few such blocks available. I believe, therefore, there is room for developers now to move in here with new stock.”
