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Cape holiday homes in demand

Cape holiday homes in demand

With the Cape tourist authorities predicting an influx of over 200,000 visitors this summer, estate agents are finding that interest in homes in resort areas is once again picking up.

"With holiday rentals in areas like Hermanus, Plettenberg Bay and the West Coast now often over R1k per day, it comes as no surprise to find that canny investors see this as the way to go," said Tony Clarke, managing director of Rawson Properties.

He said with the National Credit Act (NCA) now in operation and with interest rates no longer providing an easy ride, many investors are now interested in fractional or syndicate ownership, i.e. in buying holiday homes with partners. However, he warns, the banks are very reluctant to finance bonds with multi-owners and this can make such deals difficult.

Clarke added that, with the "traditional" holiday resorts now high priced, it would be wise to invest in towns that have not yet reached the peak. In the Western Cape this would include homes on the West Coast and beyond Hermanus.

Clarke says that lock-up and go apartments in holiday areas are generally more secure and have less maintenance problems than single residential homes, but are not as well-suited to entertaining.

Clarke said short term tenants have always been a more serious risk than long-term tenants but a good agent will call on them regularly – sometimes as much as one a day – to make sure they are respecting the property.

He said those buying vacant holiday home land rather than a completed unit should bear in mind that the days of selling a plot a year or two later at double the value are over.

"The appreciation here will be in line with predicted national figures for 2008 which are lower than those of recent years. However, as a long-term investment this type of property is still a very good option."


Disclaimer: The information presented and opinions expressed herein are those of the authors and do not necessarily represent the views of Estates Report and/or its partners.