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Your guide to buying a holiday home

Has your dream of owning a slice of holiday paradise resurfaced? 

For many, the idea of having an idyllic coastal or leisure setting that can be enjoyed on a whim and for any length of time is appealing. 

And the holiday season is an ideal time for prospective holiday-home investors to scout out the market. But will the budget match expectations?

Areas like the Atlantic Seaboard in Cape Town, the Garden Route, the KwaZulu-Natal (KZN) North Coast, and the Big-Five areas in the northern parts of the country generally see an increase in demand and transactions for luxury and leisure properties over the holiday period, according to RE/MAX Southern Africa. 

 Western Cape

 Cape Town’s Atlantic Seaboard tops the list as the national property hotspot, having generated significant capital growth and rental income growth over the past few years, says Andrew Golding, CEO of the Pam Golding Property Group (PGP).

Luxury apartments on this expensive strip of real estate range from between R65 000/m² to R150 000/m², says PGP. But recently a luxury penthouse here even soared past the R200 000/m² mark.

 Average selling prices along the Atlantic Seaboard have tripled over the past 10 years and values over the last five years are up by 67%, reports Seeff Property Group. Home to six of the country’s most expensive suburbs, average prices range between R16m and R23m, Seeff data shows.

“Given the phenomenal price growth on the Atlantic Seaboard, you really cannot go wrong with an investment here,” Samuel Seeff, chairman of Seeff Property Group, tells finweek. Hotspots, he says, include Clifton and Camps Bay, Sea Point, the Waterfront and the new Silo District.

Sea Point remains one of the most reasonably priced Atlantic Seaboard suburbs. 

But notable capital value appreciation in recent years means ceiling prices have risen significantly and the entry-level price for a luxury apartment in an older building is now around R6m. New developments are significantly more expensive, like the Elements apartments currently under construction, priced from R8.495m to R15.095m for a to-end unit, says Seeff’s Ross Levin.

Second to the Atlantic Seaboard for millionaire-owned second homes is the Garden Route town of Plettenberg Bay, states a recent New World Wealth Report. Luxury houses here range from around R10m to just under R60m for an exclusive beach house with commanding sea views.

But the area is not only playground to the rich and famous. While perhaps not on the beach or river, nor located on sought-after drives, vacant plots can be had for around R200 000, an apartment from around R650 000 while houses range from about R1.5m, says Seeff’s Kevin Engelsman.

Prices along the Whale Coast, which includes popular holiday destination towns like Hermanus and Gansbaai as well as Somerset West, Strand and Gordon’s Bay, have risen by 12.8%, says Sandra Gordon, Pam Golding Properties senior research analyst.

Part of the appeal of these coastal towns is their proximity to Cape Town and some of the best whale watching on the globe.

New World Wealth named Hermanus as one of the most popular destinations for multi-millionaire-owned second homes, ranking alongside the likes of Cape Town, Knysna, Plettenberg Bay and Zimbali. 

Luxury properties in Hermanus with a top-class seaside location now reach price levels of between R20m to R40m, reports Seeff.

More affordable Western Cape areas

Even while property prices in Hout Bay are up by 13% since last year, more affordable holiday homes are still up for grabs in this less-costly Atlantic Seaboard suburb. 

At Royal29, a new sectional title development in Hout Bay, R2.6m will snare a 77m² apartment with mountain views and a glimpse of the bay, say Seeff.

Holiday towns like Knysna, Mossel Bay, and Sedgefield, although benefitting from semigration, still offer more affordability.

On the Cape west coast, towns such as Yzerfontein and Langebaan show strong market activity for holiday and weekend accommodation. In Yzerfontein, three-bedroom houses start at about R2.2m, says PGP.

The coastal village of Arniston on the Cape south coast also remains a popular holiday home destination, says Seeff’s Elaine Beyers. Properties here range in price to R8.9m.

Eastern Cape

Port Elizabeth continues to attract a small but steady stream of holiday-home buyers in all price ranges, says PGP’s Ian Olivier. Apartments range from under R1m to R7.5m, the latter the asking price for a two-level penthouse in Summerstrand.

Townhouses and freestanding houses in Summerstrand and Humewood range from around R1.5m to about R8m, with the median asking price for a luxury home close to the sea around R5m. 

“The second home/holiday home market is still quiet in East London,” says PGP’s Sean Coetzee. “Sought-after” areas are Bonnie Doon, Nahoon, Bunkers Hill and Beacon Bay where pricing ranges from R2.2m. Gonubie, with pricing from R1.5m, is still very popular because of its “village” feel, he adds.

The top end of the St Francis Bay property market continues to perform well with multiple sales over R7.5m over the past three years, says PGP’s Richard Arderne.

But despite many plots being sold, virtually no houses are being built in Santareme, a Mediterranean-styled village on the canals and golf course in St Francis Bay. “It appears that upper-middle income South Africans, who might have afforded a holiday house 20 years ago, are no longer able to,” he says.

Prime beachfront houses range in price from R6m to R12m and R4m to R15m for the canals. The old part of town comes with more affordability with prices of R1m to R4m.

In the Kenton-on-Sea area, the holiday towns of Boknes and Cannon Rocks offer holiday homes in the R1m to R3.5m range.


The North Coast’s major towns from Umhlanga to Ballito, once sleepy holiday villages, have steadily become more commuter towns as Durban’s economy moves north.

The Zimbali Coastal Resort on the KZN North Coast has always had a very high holiday investment and holiday letting component, says PGP’s Sascha Bausch. And while Zimbali boasts some of the country’s highest property prices, it caters to a broad spectrum of buyers.

An entry-level 200m², three-bedroom semi-detached unit in The Sanctuary in Zimbali sells for R4.95m, while a top-end four-bedroom house here markets for nearly R12m.

KZN’s more affordable South Coast has not benefitted as much from Durban’s expansion, and has thus been a relative underperformer for some years, says John Loos, household and property sector strategist at FNB.

Areas that continue to be in demand along the South Coast are Shelly Beach, St Michaels On Sea, Uvongo and Margate, says PGP’s Mohammed Amra. Here the entry-level price for a one-bedroom holiday apartment is R550 000 and R600 000 for a two-bedroom apartment.

Holiday-home buyers on the South Coast are primarily cash rather than mortgage buyers, reveals Amra.

 It was a sellers’ market until early last year. But the fallout from economic and political headwinds and credit downgrades has shifted the balance in favour of buyers.

“We head into 2018 with a buyer’s market for most areas, even some Cape locations,” Seeff Properties’ Samuel Seeff said in a statement.

Tips for buying a holiday home

Pam Golding Properties’ Jason Shaw shares the following advice, keeping in mind the underlying aim to achieve overall medium to long-term capital appreciation.

Sea view coastal property holds its value.

Close proximity to a beach with sea view represents a sound investment.

Coastal properties with easy access to amenities (schools, hospitals and shopping centres) have quicker turnaround times providing a better ‘exit’ solution if you are compelled to sell.

Check the lettability of the property in case you decide to rent it out.

Consider a hassle-free, low maintenance, sectional title property with good letting income that could assist you with paying off your bond.

Stands in secure gated estates with sea views provide an opportunity to create a great leisure property with a sound capital return.

Coastal properties within 30 minutes of an economic hub are safer investments due to a bigger pool of potential buyers (residents and holidaymakers).

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