The South African town where house prices increased from R2 million to R4 million in 5 years

Coastal towns in the Western Cape, Eastern Cape, and KwaZulu-Natal outperformed national property trends, with the average house price in Herolds Bay increasing from under R2 million to over R4 million in five years. 

This rising sales volume and average prices were driven by strong demand, particularly in smaller, scenic towns along the coast.

Hayley Ivins-Downes, managing executive real estate at Lightstone, revealed this trend in a discussion about property valued in South Africa.

She explained that nationally, sales volumes were down 5% in 2023 compared to 2019, while homeowners paid, on average, 25% more for their properties in 2023.

In 2019, 63% of sales were less than R1 million, compared to 53% in 2023. The changing sales mix drove the 25% higher sales value, not increased property prices.

In the Western Cape, sales volumes increased by 6% from 2019 to 2023, while the average price difference for transactions was 39% more for the same period. 

But if Cape Town was excluded, the volume would have increased by 10%, and the average price of transactions would have been 43% more than in 2019, Ivins-Downes said. 

With or without Cape Town, the Western Cape outperformed the national averages.

Plettenberg Bay was the standout in terms of sales in the Garden Route, where regional sales volumes dropped 4% from 2019 to 2023, almost tracking the national average. 

However, average sales prices rose in most of the coastal towns analysed, a feature across the province’s four regions, including the Garden Route.

“Sales volumes in the Whale Coast were up 7% – Hermanus, Franskraalstrand and Gansbaai recording strong sales – Milnerton and Hout Bay drove the sales increase of 7% in Cape Town and surrounds,” she said.

On the other hand, Langebaan, St Helena Bay and Laaiplek recorded the most transactions on the West Coast, where sales were up 11% for the region. 

Regarding average sales prices in the Western Cape, Ivins-Downes said Noordhoek and Scarborough, just north of the Cape Point peninsula, recorded the highest average sales prices in the province.

The biggest percentage increase in average sales prices occurred in Herolds Bay, outside George in the Garden Route, rising from just under R2 million in 2019 to well over R4 million in 2023.

Ivins-Downes said average sales prices on the West Coast were highest in Grotto Bay, a private property in West Coast District Municipality just 45 minutes from Cape Town. 

It was declared a nature reserve in 2002 and forms part of the Cape West Coast Biosphere Reserve, which UNESCO proclaimed in 2000.

Volumes rose by 25% and the average price difference by 17% between 2019 and 2023 in the Eastern Cape, excluding Port Elizabeth and East London. 

However, the numbers tell a different story if the metros are included: volumes fell by 3%, marginally ahead of the national average of -5 %, but the average price difference actually increased to 21%, 4% shy of the national average.

“Gonubie and Jeffreys Bay, coincidentally both popular surfing destinations, recorded the biggest increases in volumes in the province”, Ivins-Downes said. 

Interestingly, the towns from Gqeberha to Oyster Bay, near the provincial border with the Western Cape, recorded higher average sales prices than the towns on the East London coastline, from Port Elizabeth to the KwaZulu-Natal boundary.

In KwaZulu-Natal, performance was flat outside of Margate, Salt Rock and Umhlanga.

Volumes were down 12% overall, with the value up 19%, and if Durban was excluded, the volume fell by just 4% – 1% off the national average – and the average price difference was 14%, Ivins-Downes said. 

This suggests that the transaction values were higher in the smaller coastal towns.