With or without a more all-encompassing public transport initiative – a topic of conversation which I intend to discuss more in future columns – Hermanus is a fairly unique town within the context of the residential property sector.
In the current buyer’s market, property professionals spend a lot of time analysing the markets in order to provide effective and useful pricing information to their sellers. Our firm in particular, uses Lightstone Property and the Deeds Office as essential sources of information. All this data is incidentally in the public domain, and hence we can use it without fear of transgressing any of the public access to information legislation.
The information which follows has been extracted from these two sources, but all errors which may inadvertently arise are only to be credited to the writer. Hermanus, as defined in this particular column, stretches from Fisherhaven through to Voëlklip and all the areas in between.
We all know and recognise that the residential property market has been extremely subdued over the last 12 months. As an indication, there were 880 freehold registrations in 2018, whereas for the year to date the number totals approximately 220. The market is likely to improve during the remainder of 2019, but unfortunately we can comfortably predict that it will not meet the same levels as 2018. In the sectional title market, the trend is the same, but less severe. So far there have been 50 registrations this year, which does indicate a better chance of reaching the number achieved in 2018 (120 registrations).
The age of buyers and sellers is, perhaps surprisingly, not as “aged” as people often assume. 20% of buyers in the last year were aged 65 years or older, 34% were between the ages of 50 to 64, 32% were aged between 36 and 49, and 14% were younger than 36 years.
The sellers of these houses were predominantly 65 years or older (41%), with the remaining three classifications contributing 33%, 22% and 5% respectively. The comparison of buyer and seller data points to a subtle change in the age demographics of the average Hermanus resident over time.
The final statistic that I wish to share is about the period of time that sellers in the last 12 months have owned their homes: 41% have owned their homes for more than 11 years, 8% for between 8 to 10 years, 10% for between 5 and 7 years, and 41% for less than 5 years.
The fact that so many people who sold in the last year had owned their homes for less than 5 years may have a lot to do with the relative instability of the environment in which we live and have lived for the past year. Hermanus as a town consists of a high number of entrepreneurial investors and business owners. Unlike large cities (like Cape Town) where there are significant industries which are able to survive periods of economic downturn because of their size and relevance to the total economy of South Africa, and towns from where one can commute on a daily basis to a large city to work, Hermanus creates (in principle) its own economy.
Whether this economy is generated and supported by retirees spending their pensions, or new business owners investing in the region, is largely irrelevant. What matters most is that we who live and work here will determine whether the future is brighter than the past.
But back to the property statistics. By my own calculations the value of transfers over the past 12 months is down more than 35% over the preceding 12 months. This is after adjusting for some significant outliers and exceptional sales. The trend rather than the outright number is more relevant, but the fact remains that the depth of activity in any property market is directly related to the current and future generation of economic activity.
This does beg the question: Why do we as a community not work more together to ensure that our local economy is not destroyed? Surely the issues which arise – and we know they are real and numerous – can be resolved by real and honest discussion amongst all affected parties.
Let us preserve our town and work together to ensure its growth. The more investment in Hermanus and its surrounds, the more the economy grows, the more work is created, and the better off we will all be in the longer term.
The views expressed above are those of the writer in his personal capacity and may not necessarily reflect the views of Fine & Country as a national and international brand.