Five years ago the fastest-growing sector of the residential property market was golf estates.
Back then, demand was fuelled largely by speculators who bought stands in newly launched golf estates, often with nothing more than a credit card, and flipped them on for a tidy profit before even taking transfer.
However, since the golf estate bubble burst in 2008/2009 a number of developments have failed . The newer, second-home golf estates in holiday destinations have been hardest hit.
But it seems there’s still plenty of demand in the big cities, typically from primary-home buyers.
Latest figures from property research group Lightstone show an uptick in sales prices in a number of primary-home golf estates for the year to date compared with 2011.
In fact, Steenberg inCape Town, Blair Atholl, the former homestead of golf legend Gary Player on the western outskirts ofJohannesburg, near Lanseria, Woodhill inPretoriaandMountEdgecombein Umhlanga are among the wealthiest suburbs in each of their cities.
With properties at an average price of R9,92m, values in Steenberg are eclipsed only byClifton(R16m). In Blair Atholl ,Johannesburg’s second-priciest suburb afterSandhurst, buyers are forking out a cool R9m on average.
At R3,64m, Woodhill is nowPretoria’s most expensive place to live, having overtaken the old-money enclave of Waterkloof.MountEdgecombe’s average values of R4,4m have risen around 25% over the past five years.
Andrew Golding, CE of the Pam Golding Property group, says the golf estate market is a tale of two halves. While demand for leisure property on second- home golf estates has declined, golf estates in primary residential areas remain sought after.
Golding says sales continue to be driven by the aspirational aspect of owning a high- end home on a prime-location golf estate coupled with easy access to lifestyle and recreational amenities and above-market capital growth potential .
“Even after the recession, established primary-home golf estates in the cities are still able to command a premium of some kind. This can range from 10% to 40%, depending on the nature of the surrounding suburbs and proximity to business hubs, schools and shops.’’
In stark contrast, properties in many second-home golf estates, especially where speculators are keen to offload stands, are selling at deep discounts.
Golding says there are exceptions, notably well-established estates that are able to draw both primary and leisure buyers. These include Fancourt near George on theGarden Route, De Zalze near Stellenbosch andPearlValleyin theCapeWinelands, where sales of top-end homes continue to test new highs.
AtPearlValley, for instance, the highest price fetched in 2010 was R12,75m. Towards the end of 2011 a home was sold for R13m, and last month a record R15m was achieved.
However, in other second-home estates prices have dropped by as much as 50%, says Seeff Properties chairman Samuel Seeff. In Pezula Golf Estate in Knysna on theGarden Routeplots can be purchased for less than R500000, about 50% of 2004 launch prices. The story is similar at nearby Simola Golf Estate, says Seeff.
At Zimbali Coastal Resort near Ballito on the KwaZulu Natal north coast,generalpricing is down by 25%. However, unit sales at Zimbali have increased over the past year.
Seeff says golf estates will always be in demand due to their exceptional security and luxury lifestyle offering. “But buyers have become very price sensitive. Unless a property offers clearly perceived value, it is unlikely to trade.”
Ronald Ennik, MD of Gauteng- based Ennik Estates, agrees that while golf estates still offer a desirable lifestyle for many, buyers have become more discerning — not only in terms of price and location, but also about the financial affairs of the estate.
Buyers are concerned about the high costs involved in running a golf course and club house and are wary of buying into a development that poses an insolvency risk.
Ennik says golf estate buyers are opting increasingly for developments where home owners are being effectively “ring- fenced” so they don’t have to subsidise the golf course with sky-high levies.
The Houghton, a luxury apartment development overlooking the 7th and 12th holes atJohannesburg’s Houghton golf course, is a case in point, says Ennik.
Since its launch in mid-2010, 118 of the 260 units have been sold at prices starting from R3,5m. An 824m² penthouse with a 400m² roof garden was recently sold for a record R39m.
