With more than 23 000 students in need of accommodation every year, the residential property market in Stellenbosch is robust.

Shawn Pieterse, owner of the RealNet franchise in Stellenbosch, says it is this demand that largely accounts for the average 22 percent annual capital growth in property values over the past five years.

Continued demand sustaining price growth

"And while growth has now flattened somewhat from those highs, continued demand is keeping it above the national average."

Units in the campus area, also known as the Golden Triangle, are perennially in great demand and are sold at up to R33 000 per m², says Pieterse. "A large percentage of owners in this area have bought cash and can afford to hold out for asking prices since rising interest rates put no pressure on them. At the same time, student accommodation here is in strong demand among buyers from Gauteng and the Free State."

Prices of off-campus flats range between R450 000 and R1.4-million depending on size and location while the Welgevonden security estate about five kilometres out of town offer units of about 140m² at prices ranging between R1.2-million and R1.6-million. Welgevonden is popular, says Pieterse, and the estate records an annual sales turnover of just less than 100 properties.

He adds that the rest of the Stellenbosch residential market has been marginally affected by the credit crunch and interest rates and there is thus slightly more room for price negotiation. "But it does not hold true in every case — we recently had a cash buyer who offered R1.2-million for a property with an asking price of R1.25-million and the seller refused the offer.

'Tough times' not evident in Stellenbosch

"Moreover, the 'tough times' widely touted in the media are not very evident in the local market. Our office has already achieved about 40 percent of the turnover we achieved in the last financial year and the busy summer season, when buyers start looking to buy student housing, still lies ahead," he says.

A new trend, he remarks, is that increasing numbers of buyers from Johannesburg are scouting for property in Stellenbosch and the surrounding winelands. "They plan to settle their families here and commute to their city jobs."