Property slump hits Garden Route golf estates
The property market slump has also taken the shine off the host of multimillion-rand golf estate developments on the Garden Route, a sector which less than 10 years ago was still being heralded as a major economic driver for the region.
This year alone the golf estates of Pinnacle Point in Mossel Bay and Le Grande in George have been on the receiving end of insolvency rulings, while property advertising suggests other Garden Route golf estates are under pressure.
Last week there were 26 properties for sale at the Oubaai golf estate outside George, with stands from R1 million to luxury houses listed for R10m up for grabs.
Pinnacle Point had 15 properties for sale, including a R14m luxury house, 53 properties were listed at Pezula in Knysnawhile 46 properties were on sale at Kingswood in George.
01 September 2011
Golf Estate Holiday Homes - A Match Made in Financial Hell
We know that when things turn south in the property market, holiday homes are usually the first to be offloaded at discount prices. And we also know that golf estates tend to be crap investments. So combine the two and what do you get? The Garden Route!
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15 comments:
Financial hell for the owners, but for me, manna from heaven. Golf estates are obscene for so many reasons, but the one at Pinnacle Point was especially disgusting. There are priceless archaeological digs under the cliffs there, where researchers are tracing modern humans' first origins to that area. Except that the dig keeps caving in because of the millions of gallons of water they use to irrigate the phuqing fairways overhead. The artifacts that aren't buried by cave-ins are getting wrecked by the fertilizers seeping down. So I say Thank you sweet baby Jesus for every moment of pain the golf estate set suffer.
Not just the golf estates, though: I read an article this week about a glut of hotels being auctioned off along the Garden Route, including one whose develop committed suicide earlier this year. Very, very grim times if you're one of the few who got way too greedy.
Golf estates have no place in a climates such as South Africa. They are grotesque displays of wealth and privilege. The worst example is that Steenberg one, right next to Pollsmoor prison. The joke is on the inmates of Steenberg, sharing their "exclusive" address with their fellow pondscum inmates.
Good !
I hate Golf.
Turn them into motocross trails :)
Indeed, I smile ear to ear when I hear this. A Golf Estate is by far one of the most environmentally unfriendly symbols of wretchedness you can find. My pet hate is Goose Valley (outside Plett), with their cheap repulsive Tuscan apartments and water guzzling greens, visited only once a year for a week by their stupid overweight miserable owners, or their worthless, insignificant brood. It destroyed some of the most beautiful wetlands in the Garden Route. I hope, nay pray, that they go under in the most amazing cataclysmic fashion.
Honestly, anyone that buys into something who's well-being is reliant on liquidity of your neighbours' is asking for trouble. Be it a CBD high-rise (complete with glass front desk and trademark uniformed black dude), Gold Estate, or yes - hotel chains who greedily gave the local tourism industry a proverbial PK when times were good, in search for the international cash cow.
There's an interview on MoneyWeb where the CEO of Sun International is going on about how poor tourism is and their occupancy rates are dwindling, some below 50% during peak times. Cry me a river.
Ex Golf estates could lend themselves nicely to re-localised agriculture in a post peak-oil world. Irrigation laid on, fortified perimeter communal buildings already set up. Might be an idea to start a co-op with like minded folks and make a bid for an empty one.
@Bean Counter. Couldn't agree more re: Pinnacle Point. Even worse was the pittance they paid the Mossel Bay Municipality (read: bribery and corruption) -- and subsequent broken promises and contraventions of conditions that locals had managed to get forced on them through petitions ... that the local municipality won't enforce of course! And of course, some of these issues have been raised to government levels by locals and it is equally clear that the golf estate developers have a far more powerful 'lobby' than those interested in environemntal or cultural issues. So basically it is pretty clear that the developers there are up to their eyeballs in corruption. Going belly-up is way less than they deserve!
Live on a golf estate permanently and you guys have absolutely no idea what you are talking about. Might not be a good investment as a holiday home but definetly good for permanent living. Go back to your little boxes and leave us alone playing golf and sipping champagne
@ most recent Anon, I've met enough golf estate dwellers to know that you're one of only two breeds. Either you're a very nice person who means well, but are profoundly limited intellectually and deeply ignorant about the world in which you live; or you're a c*nt. I suspect you might be the first breed, given that you seem to think that playing golf is a worthwhile way of spending your few years on earth. But whichever you are, there's no arguing with you, so enjoy the golf and the bubbly while you can.
I know a guy who used to sell leg cream in golf estates. Now that the property market is down he no longer seLls leg cream . He used to make 100K a month, now he sellls nothing and wishes he would have had a decent job
Beancounter, You comments sound like you are a very frustrated and unhappy person. You may need some medical help for depression
Hallo renters
There are two types of people in this world :
The owners, and the people that rent from them.
If you find yourself in the renters class, like most of the folk on this blog, then don't be angry at your landlord.
Just acknowledge that you are an aspiring property owner, and continue to pay your rent on time so that the landlord does not put you out on the street.
Toodles my dear landless class.
JJ
And why would anyone stand in judgement of a person who likes to swing a golf club?
We start talking about the class of investment in golf estates, we end up hating on golfers?
For Chrissakes Bean Counter, you're one sick puppy!
Go get yourself some professional help, dude!
You are just one "tipping point" away from hurting someone and landing up in Pollsmoor!
@JJ
There are 2 type of people ... clever types who can spell "Hello" ... and then there are those that can't.
Likewise, there are clever types who can recognise that house prices are historically double where they should be and that people are probably going to get very hurt buying property at this stage in the cycle ... and then there are those who are not so bright who think property always goes up, even when it is still at a historic monster bubble high.
R12000 monthly rent to the landlord or R36000 monthly interest to the bank ... wow, such a tough decision.
Those who can spell "Hello" would probably go for the first option. Those who can't spell "hello" go ahead and buy the house, pay the bank 36,000 a month, collect the 12,000 from the renter and think they are really clever because they are now a "land owner".
Of course, we all know here how the story ends. Cut to 4 years time, the landlord has paid out 1.7 million more in costs than he has earned in rent. He is forced to sell the house and also makes a million loss on the price. So he is in the hole for 2.7 million.
The renter however has being putting away the 28000 a month he would have spent in interest and costs had he bought. He has saved 1.35 million. That covers a big chunk of the cost of the repossessed house that he buys off his bankrupt landlord.
The renter is now the owner and the previous owner is a renter. Oh the irony.
@ CJ
I love happy endings.
Hi - not seeing the bubble so much in commercial property (except along the coast) Could it be that purchasers in this market actually do the cash flow projections and are looking for a specific yield?
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