We are all going on a summer holiday

“Demand for leisure property has been stable in the Umhlanga area over the past year, especially for properties that are close to the Umhlanga and La Lucia beaches.  A large majority of the buyers in Umhlanga are from other provinces, particularly Gauteng and the Free State. They come to the area for a holiday and fall in love with the lifestyle that is on offer here. Buyers usually come back in January after their holiday to look at purchasing a leisure property,” says Bailey.

Adrian Goslett, CEO of RE/MAX of Southern Africa, says that steady low interest rates and current market conditions have allowed many buyers who were previously unable to consider purchasing a leisure property the opportunity to invest in good value for money opportunities.,. Property along the KwaZulu-Natal north coast has always been regarded as a sought-after investment, especially those properties within secure estates.

Data collected from Lightstone, a property statistics provider, shows that a large number of the recent buyers in the area are between 50 and 64 years old, which suggests that they may be looking to secure holiday homes as an investment for their retirement. The area consists mostly of sectional title units which make up 80.05% of the property available to buyers. The remaining 19.95% consists of freehold housing. The average price paid for a sectional title unit was in the region of approximately R2,119 million, while the average freehold home costs around the R3,735 million mark.

Bailey says that due to the general property market conditions that most of the country has experienced over the past couple of years, many buyers think that there are bargains available to them in all areas, which is not always the case. “In areas such as Umhlanga, buyers can expect to pay market-related prices, and likewise sellers need to ensure that their prices are within fair market value to remain competitive within the market,” he says.

According to Bailey, due to the stable demand of holiday property in the area, prices have not dipped as much as in other regions. He says that while seaside properties in KwaZulu-Natal do not rival the Western Cape's Atlantic Seaboard in price, the properties are still fairly expensive in general holiday-home terms. “However,” he says, “What is important from an investors point of view, is what the prices will do in the future. Given the long-term demand for seaside properties and the limited supply thereof, prices are bound to increase even more over time. The fact that demand for property in KwaZulu-Natal is shifting northward will further assist with capital appreciation.”

Bailey says that the demand for holiday property and shortage of prime beachfront accommodation in Umhlanga has opened up opportunities for investors to rent out their holiday homes to other holiday-makers. “During the peak periods of the April, July and December school holidays, investors have been able to rent their property for as much as R2 000 to R3 500 per day. Although investors may have paid a relatively high price for their property, there is a good chance that they will be able to profit from their purchase and see a good return on their investment,” Bailey concludes.

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