Growth in lifestyle estates
2006-04-12
LIFESTYLE estates in the Cape Winelands have been highlighted as one of the best long term property investments in the wake of a possible levelling off in residential property prices, according to a top property economist.
Property Economist Erwin Rode says it all comes back to scarcity of stock and increasing demand for the Cape Winelands’ lifestyle.
“Supply is influenced by political decisions, like restricting new golf and lifestyle and polo developments on the grounds of water scarcity and elitism.
“Furthermore, heritage-preservation considerations in the Paarl-Franschhoek Valley might further restrict new supply in future.
“Thus, the prospects for the valley are similar to those of properties on the Atlantic seaboard of Cape Town, where little new supply can be added, yet demand keeps on growing in tandem with a growing super-wealthy class of citizen.”
He says these factors should result in above-average long-term growth.
Rode also analysed estate agent and deeds office sales data with regards to two lifestyle estates in the Winelands, calculating quarterly median prices for two estates - separately and combined - from the third quarter of 2002 till the second quarter of 2005.
Although sales did reduce since the fourth quarter of 2004, Rode says that not too much should be read into this because it could be attributed to the sales drives of the developers coming close to their end as stands were effectively sold out, and that most of the transactions of the past year were in fact re-sales.
“More significant is the price trend. In the second quarter of 2005, the median price came down slightly compared with the first quarter, but prices were on average still significantly higher than in the fourth quarter of 2004.”
Rode says there is no evidence as yet that the upward trend in prices has been broken. However, it cannot be ruled out that re-sales by speculators in the second quarter of 2005 had a slightly detrimental effect on price levels.
A good example of the demand for these properties is the Val de Vie Lifestyle Estate in the Paarl/Franschhoek valley. Here 220 first phase plots sold out in just two weeks in 2004. The second phase launched in October 2005 followed suit, with all 150 plots selling prior to the official launch.
The estate has just launched its third phase called Isle de Vie offering 35 full title residential plots priced between R1,6 million and R2,85 million on the edge of four adjoining lakes, which according to developer Martin Venter has seen equally strong demand from buyers.
“We sold 10 of the 36 plots within the first week of launch,” he says.
Situated on the water’s edge - on an island between the lakes - the lakefront prime plots are positioned on the highest land within the estate to provide vantage views of the surrounding mountains and vineyards.
"The Val de Vie estate stands out as one of the best current investment opportunities in the Winelands in terms of its value for money, world-class facilities and the fact that residents live on a producing highly rated wine farm and can even bottle under their own label with the winemakers’ guidance."
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