THE PINNACLE OF PROSPERITY IN A TIME OF UNCERTAINTYDespite a slow economy, Pinnacle Point Estate has seen record property sales in the last 18 months
In the last year, the state of South Africa’s economy has dominated many a sombre dinner conversion. Unemployment is on the rise, disposable incomes continue to diminish, interest rates have spiked and consumer confidence is low. Despite the economic uncertainties, there is a silver lining – one which hugs the sparkling coastline near Mossel Bay in the Southern Cape. Indeed, Pinnacle Point Estate has seen record property sales over the last 18 months. In this feature, we take a closer look to understand why property at Pinnacle Point has continued to flourish.
But it’s not all bad news
In a recent Sunday Times article property analyst, Shaun Rademeyer, said that, “Despite a number of bleak predictions for both the economy and the residential property market for the year ahead‚ savvy investors can look to capitalise on the very real opportunities that current market conditions present. In fact, residential property demand flourishes when stock markets and other sectors are under pressure.”
Promising performance for the Garden Route
Tiaan Schutte, Pam Golding’s award-winning agent for Pinnacle Point, feels that property in the Southern Cape region in particular is becoming more popular. “Previously, the Southern Cape was just a holiday destination with holiday accommodation; but I think that this is drastically changing, with more and more people moving down on a permanent basis.
With the airport expanding and improved access to the area, people are actually happy to commute between the Garden Route and the big cities. The municipalities here are also in good order, which influences buying decisions.”
He has noticed a trend in the last few years whereby people are choosing to sell their property up north to buy property in the Southern Cape. “They then go back to renting property in Johannesburg or the like until they are ready to retire or relocate to the Cape – this is just one explanation for all the cash purchases we’ve been seeing.”
He adds: “I think that the market is only recently starting to bloom. We’re already in a situation where the demand is bigger than the stock available – that’s why property prices have increased such a lot over the last few years!”
And even better property potential for Pinnacle Point
Pinnacle Point General Manager, Carl van der Linde, is pleased to report that despite a subdued housing market nationally, Pinnacle Point has seen record property sales over the last 18 months. He feels that this can be attributed to the old property adage of ‘location, location, location,’ as well as the fact that the estate is financially well-managed.
Like Rademeyer, Schutte feels that the uncertainty surrounding South Africa’s economy actually boosts property sales: “85% of the sales that happened in the last year were cash transactions, and 70% of properties sold were second homes. I think that in times of turmoil, people invest more in property and take money out of the stock exchange.”
According to a recent report from Lightstone, which provides data to financial institutions for purposes of assessing values and risk, of the 11 golf estates analysed in the Garden Route, Pinnacle Point Estate has recorded the highest number of transfer registrations since January 2015. For the same period, Pinnacle Point is second only to one other estate, Pezula Golf Estate (Sparrebosch), in terms of total transfer value.
A move towards estate living
In recent years, estate living has certainly become more popular. Lightstone’s research of about 6 500 closed communities and estate properties, including coastal, lifestyle, country, wildlife, equestrian and polo and golf estates, revealed that the total rand value locked up in the estate market was close to the total value of all residential properties within the City of Johannesburg. Properties in residential estates account for 5.1% of the total volume of 6.2 million residential properties in South Africa, but accounted for about 15.1% of the total overall property market value of R4.3 trillion. “This is a noteworthy figure,” says Paul-Roux De Kock, the analytics director at Lightstone, “especially when considering the increasing market activity for the estate property market over the past few years, which shows strong growth in both the volume and value of estate sales.”
He says that it should come as no surprise that estate living is on the rise, as more South Africans are seeking properties that offer a heightened level of security and provide better investment opportunities for them.
However, De Kock says that these are not the only factors that make estate property buying so appealing: “The fact that more developers are including lifestyle elements into their estates, such as catering for pastimes such as golf and fishing, with some going as far as incorporating hospitals and schools within the estate property, ensured that those looking to purchase a property within an estate received maximum value for their investment.”
Van der Linde agrees that buyers are looking for security and well-managed community living. Additionally, there is an increased focus in estate communities on sustainability and self-sufficiency, reflecting the growing expense and erratic provision of public utilities; as well as increased environmental awareness.
In his experience, Schutte has found that clients take a number of factors into account when looking at estates for property investment. “Firstly, safety, and then the availability of loads of facilities within your boundaries, such as being able to go to clubhouse for dinner, or visit the beach or nature reserve.”
He adds that when his clients are looking for their dream home, the key features they’re interested in include, “safety, views, accessibility from airport, beach access and golf memberships”.
New developments to further enhance Pinnacle Property
As De Kock points out, lifestyle factors and facilities are one of the major contributors to South Africans choosing estate living. In a development project taking place over the last year, Pinnacle Point has been working on a number of facilities to enhance the Pinnacle Point’s ‘lifestyle’ appeal.
“I am confident that our new developments and facilities have made potential new investors’ decisions far easier,” van de Linde says.
(See the article on new facilities at Pinnacle Point for an update on the estate’s exciting new developments.)
A jewel in the Southern Cape crown
Pinnacle Point is perfectly positioned to take advantage of a number current trends – the move to estate living, the demand for facilities and policies that enhance residential lifestyle, as well as the increased popularity of the Southern Cape area.
And within the Garden Route area, Pinnacle Point is a clear stand-out, well-positioned to take advantage of this growth. It’s the only estate in the Garden Route area to offer an internationally-recognised golf course, two private beaches, a nature reserve and a Provincial Heritage Site (Pinnacle Point Caves), not to mention new facilities such as a wellness centre, indoor pool and golf barn.
“Pinnacle Point is a very well-managed estate with close proximity to the airport, and one of the few estates in the country that boasts direct beach access, a world-renowned golf course, and a range of entertainment options, including a casino, right on its doorstep,” says Schutte. “I am very proud to be associated with such a prestigious brand and I look forward to finding many more people their dream homes and introducing them to the beauty and tranquillity of the Southern Cape.”
If you already own property at Pinnacle Point, you can rest assured that your investment will continue to give back in many ways. And if you’re still looking…best you hurry because the time has never been better to invest in your own piece of paradise!
A bleak national outlook
The ABSA Housing Review of the first quarter of 2016 states a number of sobering facts:
- Consumer confidence, as measured by the Bureau for Economic Research (BER), declined further to -14 index points in the fourth quarter of 2015. An annual average of -9,5 index points was recorded in the consumer confidence index in 2015, which was its lowest annual figure since 1993.
- Growth in real household disposable income, i.e. after tax, inflation-adjusted income, slowed down further to an annualised rate of 0,7% in the third quarter of 2015, which was the lowest growth on record since the third quarter of 2009.
- The general outlook for nominal house price growth is to remain in the single digits for the next two years, with the risk for price growth to the downside against the background of trends in and prospects for the economy and the household sector.
- Real year-on-year middle-segment house price growth was lower due to declining nominal price growth and trends in inflation.
- Based on expectations for nominal house price growth and consumer price inflation in 2016 and 2017, real price deflation is projected over the two-year period.