February 18, 2012: Pam Golding Properties (PGP) was recently awarded exclusive marketing mandates for two prestigious new residential developments in sought after locations in Umhlanga.
Says Elwyn Schenk, PGP area principal in Umhlanga and Umdloti: “Conventional wisdom relative to cycles in the real estate market suggests the start of a property market recovery is characterised by some or all of the following factors: Low values, a decline in foreclosures, some easing in credit availability, low turnovers and a shortage of stock, and a pent-up demographic demand.
In the picture: An artist’s impression of the Beacon Rock development
“In my view, residential property, especially in the areas of the ‘golden triangle’ of the Western Cape, North Durban/Umhlanga and Johannesburg display all these characteristics. In La Lucia, Umhlanga and Umdloti, particularly, prices are in most cases well below their new equivalents. Banks are finding value more readily and credit is easing, albeit at a gradual pace.”
Beacon Rock
In Umhlanga Village, PGP has acquired the exclusive marketing mandate for the “Beacon Rock” development, which is already under construction. This mixed-use project incorporating 68 apartments launches in December 2011 and the developers believe it has universal appeal, with its close proximity to Umhlanga’s main beaches, restaurants and entertainment and sophisticated security features.
In the Gateway area, close to Chris Saunders Park, PGP has been awarded sole mandate for an ultra-luxurious, 68-unit apartment building called “The Elements”, which will employ “green” technology to minimise its carbon footprint.
Says Schenk: “There are one, two and three bedroom apartments of varying configuration, from 50sqm to 108sqm in size and priced from under R1 million. Launching to the market in early 2012, the block includes two exceptional penthouses priced at R3 million and R4 million. The units in The Elements will appeal to the ‘live, work, play’ culture and also be ideal buy-to-let investments,” he says.
Umdloti's beachfront is proving quite a drawcard these days
Umdloti, too, is no longer living under the shadow of its supposedly more illustrious neighbour. PGP recently concluded a sale in the 30 Degrees apartment block for R9.5 million, a record for Umdloti, overtaking the previous highest price of R4.6 million for an apartment. On the drawing board by the Liviero Group, the same developer as 30 Degrees, and set to be launched through PGP in early 2012, is an exclusive block of six luxury apartments located in a quiet area of North Beach Road.
Golden opportunities
Director at Seeff, Umhlanga, Brett Botsis commented: “At the moment the KZN property market offers golden opportunities for first time buyers and investors alike. The prime interest rate is at an all-time low of 9% and sellers are now prepared to negotiate on their selling prices. Correct adjustments are taking place on the selling prices of properties and the banks approval rate is sitting close to 50% on their applications.
“Property prices showed positive year on year growth in November for the first time since August, according to latest results released by Ooba, SA’s leading bond originator. Ooba also recorded a substantial increase in the number of home loan applications during November 2011, which increased 36% from November 2010.”
Botsis reported an increase in activity levels in the area, with buyers expressing positive sentiments about the property market and the opportunities it provides. “In Umhlanga Rocks, a total of 237 units were sold in 2011, equating to a Rand value exceeding R630 million, a 0.95% increase from 2010. December sales from our office include a 3 bedroom 2 bathroom, 213m2 luxury apartment in lower La Lucia for R2.252 million, a 2 bedroom 2 bathroom, 105m2 duplex on Marine Drive for R3.2 million, a 3 bedroom 3 bathroom, 150m2 duplex on Lagoon Drive for R2.8 million and a large family home in La Lucia offering 4 bedrooms and a large entertainment area with sea-views for R4.8 million.”
Upmarket
Botsis said the company had listed a few seriously upmarket beachfront apartments, including a fully-furnished, stylish sub-penthouse at The Oysters for R9.2 million, a luxuriously renovated beachfront duplex with direct beach access, offering 3 bedrooms all en-suite, for R6.5 million and a large 3 bedroom apartment offering beautiful vistas and breath-taking sea-views over-looking La Lucia, with a price tag of R3.4 million. “The recovery in the property market is clearly evident.”
North Coast living remains a very attractive option
Jawitz opened its first KZN branch in Ballito towards the end of last year.
Herschel Jawitz, CE of Jawitz Properties, commented on the state of the property market: “The residential market in 2012 will, for the most part, mirror the performance of the South African economy, which is holding its own despite global trends. Uncertainty remains as to the rate at which the economy may grow or contract over the next 18 months.
“The residential market is no different and given the current economy, it would be difficult to expect anything else. Price growth, even if in nominal terms only, is managing to hold its own given current economic volatility,” says Herschel Jawitz, CE of Jawitz Properties.
“Banks continue to report soft demand in the market, but these are general statements and do not necessarily reflect the market as a whole,” says Jawitz. “Coastal leisure markets are under pressure and will remain so for some time as supply significantly exceeds demand. It is not the same, however, in the metro areas, particularly in the price bracket up to around R3.5 million where demand is better than the banks’ research suggests. There is activity.
Faster rate
“Interestingly, lending on cars, personal loans and credit cards is increasing at a much faster rate than mortgage financing. Ironically, it would appear to be easier to get an unsecured loan than a mortgage loan secured by bricks and mortar.
“Despite the fact that property prices and demand are sluggish, there will always be those, who for financial or emotional reasons want to buy and can afford to buy. In previous markets, the buy-to-break-even time-frame was about three years as opposed to the current five years. Provided that buyers take a long term view, residential property will show real growth.”
Jawitz noted that first time buyers increased considerably in 2011, versus 2010 and 2009 despite consumer indebtedness and the economy. According to FNB research, first time buyers made up 23% of buyers in 2011. “This is important. First time buyers will ultimately support the overall recovery of the market from a demand and then price point of view. The recovery has to be ‘bottom up’ for it to be sustainable.”
Andreas Wassenaar of Seeff Dolphin Coast commented: “The greater Ballito area, which comprises the ‘Dolphin Coast’ – La Mercy to the Tugela River Mouth – is a hot spot in terms of growth. The new King Shaka airport has acted as a catalyst and, together with the major investments in top end residential estates such as Zimbali Coastal Resort, Simbithi Eco-Estate, Brettenwood Coastal Estate and Dunkirk Estate, a migration into the area is being experienced.”
An upbeat Wasserman continued: “People are relocating their businesses and their families to take advantage of the unparalleled lifestyle experience that Ballito offers. There is a definite trend of people buying property to live in as a primary residence, rather than only a holiday home. Although Ballito will remain a very popular holiday destination, more and more families are moving into the area permanently.”
The most active price range for Seeff Dolphin Coast has been the R2m-R8m bracket, Wasserman commented. The market above R15m has been the slowest. Value is the biggest driver of activity across all price ranges. Over-priced properties have little chance of finding a committed buyer in the current market.
“Of the various suburbs and estates, the premium demand areas for long-term growth are the main gated estates within the immediate Ballito area: Zimbali Coastal Resort, Simbithi Eco-Estate, Dunkirk Estate and Brettenwood Coastal Estate. The traditional suburbs have lost out in terms of demand and value to the security focused gated estates. The outlying areas of Princes Grant, Blythedale, Zinkwazi, and Tinley Manor have been far slower in terms of trade.”
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