Real Estate Investor Magazine South Africa Real Estate Investor Magazine - September 2017 | Page 17

FEATURE ARTICLE
estate to the next, depending on the layout and availability of
amenities. Regardless of the type of estate, one thing is clear:
A good estate is one that offers residents a better quality of life
than they would've had elsewhere.
Professor Francois Viruly, associate Professor at University
of Cape Town says that estate living has attracted a lot of crit-
icism from authorities for only targeting high-end individuals.
He would like to see more mixed-use schemes for the lower
end of the market.
Capital growth investment and good rental returns
According to Lightstone’s July 2017 Residential Property
Indices, the inflation rate of sectional titles has held surpris-
ingly stable over the past year (around 4%), whereas freehold
properties has been steadily decreasing. In real terms, this
translates to sectional titles being a relatively safe investment,
with better chances of good returns. Another interesting sta-
tistic was recently revealed by Rode’s Report for the first quar-
ter of 2017.
It states that flat rentals are generally outperforming house
price growth in Johannesburg (7% growth); Cape Town (6%);
and Pretoria (6%). On average, house prices - including both
freehold and sectional title - grew between -3% and 8%. This
is good news for those looking to invest in estates, as it’s been
found that tenants are willing to pay more for benefits like
security and communal areas.
Lifestyle estates have boomed over the past decade, with
developers constantly resetting the standards of what consti-
tutes quality. As in any market, estates offer different types of
lifestyles and solutions to different demographics.
Two of the most popular types of lifestyle estates at the mo-
ment are golf and eco estates. A steady stream of these has
appeared across the country, with some of the most prominent
being located in the Western Cape and Gauteng respectively.
The popularity of these variations on estate living is largely due
to the lifestyle options they offer residents. In addition to this,
the green movement has taken hold, with an ever-growing
number of buyers taking the eco-friendly factors of a property
into account when investing.
Western Cape
Diverse landscapes and a wide range of natural attractions
means the Western Cape offers prime examples of high-qual-
ity lifestyle estates. Historically, the property market in the
Western Cape has seen stronger growth than the rest of the
country, with a steady stream of investments from Gauteng
and beyond.
According to Lightstone’s report, Cape Town has seen an
inflation rate of around 12% in the early months of 2017,
as compared to Johannesburg’s 4%. In general, it’s also been
found that coastal property sees a higher inflation rate (7.7%
in 2017) when compared to non-coastal’s 3.7%. While this
means property prices are higher in the Western Cape than
elsewhere, it also bodes well for investors, as healthy returns
are more likely.
While the amount of available properties in the Western
Cape aren't enough to meet the growing demand, buyers are
spoiled for choice when it comes to luxury lifestyle estates. In
particular, areas surrounding Cape Town are popular.
Langebaan is a sleepy town located on the West Coast.
Within an hour’s drive of Cape Town, residents are afford-
ed the convenience of central living, combined with the peace
and quiet of a village. Home to top-notch golf courses and the
famous lagoon, Langebaan offers something to everyone. The
Langebaan Country Estate is an increasingly popular choice
to buyers, with its eco-approach and unpolluted surroundings.
Indigenous plants, wildlife, and birds ensure a peaceful stay,
while activity-focused amenities ensure there’s always some-
thing to do. As we’ve seen, golf courses are still one of the most
popular facilities within estates, and Langebaan is no different.
A driving range and 18-hole Gary Player course will satisfy
the needs of any budding PGA champion.
The AfrAsia Bank Africa Wealth Report, published in
April of this year, shows that two regions are showing par-
ticular growth. Both of these are located in the Western Cape
- and are also home to some famous lifestyle estates. The Paarl,
Fransc hoek, and Stellenbosch area has been identified as the
fastest growing region in the country, with the highest rate of
private wealth creation over the past 10 years. According to the
report, the total wealth held in this area is approximately US$
44 billion. Currently, it is estimated that the area is home to 3
000 dollar-millionaires.
Little surprise, then, that the area is home to one of the
most prestigious estates in the country. As can be expected,
Val de Vie offers residents far more than fancy gates. Housing
private vineyards, polo fields, a pre-school, and the obligato-
ry golf course, the estate is also filled with open spaces and
lakes. The trend of building private schools within estates is
rising, with more developers seeing the opportunity to create
a holistic lifestyle solution. Within an hour’s drive of the city,
residents are once again afforded the opportunity of relaxing
surroundings combined with ease-of-access.
The second area identified by the Wealth Report is the Gar-
den Route. Including areas such as Knysna, Plettenberg Bay,
and George, the area is estimated to hold wealth to the total of
US$38 billion. Approximately 2 900 millionaires call the area
home, particularly those seeking a second home or retirement
property. World class beaches and stunning scenery has se-
cured this area a spot on the most desirable property list, with
several luxury estates having been built in the past few years.
Pezula Golf Estate is located a few minutes from Knysna,
and offers residents a world-class residential experience. The
estate consists of 418 homes, most with stunning views over
the lagoon, mountains, and ocean. Indigenous plants are pre-
served, which means the area supports a wide range of animal
and bird life. According to data obtained from Private Proper-
ty, the median asking price for typical four-bedroom home in
the estate is R4, 8 million, with the estate’s properties making
up approximately 8% of the properties listed for sale in the
Knysna area. In terms of rental income, the median asking
price for a typical home in the estate is R16 500 a month,
representing 4% of Knysna’s rental market.
Gauteng
The economic hub of the country, Gauteng is home to some of
the best lifestyle estates. With a focus on security and tranquil-
ity, these are marketed as a safe haven amidst the hustle and
bustle of daily life. Being the largest market in the country, it’s
no surprise that there are countless lifestyle developments to
choose from. As is typically the case in this market, developers
have made great strides in improving on existing models to
ensure residents are offered the best possible lifestyle.
A top residential estate in the Gauteng area is fairly newly
developed Steyn City situated between Fourways and Mid-
rand. Developer Giuseppe Plumari believes the appetite for
Steyn City among cash-flush buyers has been supported by
the live, work and play environment offering. He says, it is the
safe lifestyle that appeals to people even to the extent that you
never have to leave home. Steyn City boasts an incredible Jack
Nicklaus golf course, has pedestrian friendly parks and public
spaces such as jogging and cycling tracks, equestrian centres
and tennis courts.
Another new estate to emerge in Gauteng on the embank-
ment of the Jukskei river is Century City’s Waterfall Country
Estate an equestrian estate with green living in Midrand. They
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