The millionaire town in South Africa with a big property problem

Demand for houses in Plettenberg Bay over the past five years has pushed almost 75% of properties in the town to be valued at more than R3 million. 

However, Lightstone Property has noted that this has created a major affordability problem for those who live and work in the town.

Plettenberg Bay, part of the Garden Route in the Western Cape and parts of the Eastern Cape, is a magnet for rich remote workers, holidaymakers, and retirees.

According to the African Wealth Report by Henley & Partners last year, the Garden Route has an estimated 3,200 HNWIs spread across its towns. 

High-net-worth individuals (HNWIs) are those with a liquid wealth exceeding US$1 million (roughly R18 million). 

The area with the most HNWIs stretches from Mossel Bay to Storms River on South Africa’s South Coast, with notable towns including Plettenberg Bay, Knysna and Wilderness.

Beachy Head Drive in Plettenberg Bay is particularly affluent and has been dubbed “Africa’s Millionaire Row.”

Hayley Ivins-Downes, Managing Executive of Real Estate at Lightstone Property, said the demand from the leisure, retirement, and remote working markets has clearly impacted prices. 

Data shows that of the 5,700 properties in Plettenberg Bay (excluding townships), the average value now sits at around R4.9 million. 

Approximately 40% of these properties were purchased within the last five years as the town’s popularity surged. A significant portion, 420 homes, are valued at over R10 million.

However, Ivins-Downes warned that this boom has a serious downside, which is a lack of affordable housing. 

“The strength of the market above R3 million has consequences for those whose earnings restrict home ownership to affordable levels,” she said. 

Many of the people who keep the town running, those employed in hospitality, retail, municipal services, and other local sectors, cannot afford to live in the place where they work.

There is a dire shortage of formal housing for those earning below R26,000 per month, and no easy solutions are in sight.

Estate and sectional title boom

A further analysis of homeownership patterns reveals that more than half of Plettenberg Bay’s property owners are aged 60 or older. 

One in three individuals who own homes in the town also own property elsewhere in the country, predominantly in Gauteng and the Western Cape. 

This reinforces the town’s appeal as a second-home destination rather than a permanent residential base, further inflating prices and limiting working residents’ availability. The nature of housing in Plett also reflects this wealth. 

The town has a higher proportion of Estate (36%) and Sectional Scheme (21%) properties than the national averages of 18% and 18.5%, respectively, for properties valued above R1 million. Freehold properties make up the remaining 43% of the market. 

Estate homes command the highest average values, with Whale Rock Ridge topping the list at nearly R11.5 million, followed by Brackenridge Nature Estate at R8.2 million, and Schoongezicht Country Estate at R5.6 million. 

Sectional Scheme properties, on the other hand, average just under R3 million, while freehold homes average R6.5 million inside Estates and R5 million outside them.

Location within the town also makes a noticeable difference. Properties with ocean views or proximity to the beach typically fetch the highest prices. 

Keurbooms Lagoon leads in average value, though it has relatively few homes. Lower Central Plett follows closely, while Formosa and Robberg Ridge are at the lower end of the value spectrum among the 21 suburbs Lightstone analysed. 

The largest concentration of homes is found in Seaside Longships, with average property values slightly above R5.3 million.

Plettenberg Bay