RE/MAX Suburb Trend Report – Umhlanga Ridge

Area history

Located north of Durban along the coast of KwaZulu-Natal is the residential, commercial and resort town of Umhlanga. Initially founded in 1895 by Sir Marshall Campbell, the area has become a popular holiday destination since the first hotel was established in the town during 1920. Since then development in the region has been gradual, but consistent, and what was once a small village is now a commercial hub with many upmarket amenities.

Many businesses that were previously situated in central Durban have chosen to relocate to their head offices to Umhlanga.  In 2010, the Durban International Airport was also relocated to La Mercy, which is within proximity to Umhlanga, and was reopened as King Shaka International Airport.

Expansion in the area led to the development of Umhlanga Ridge, a new retail and residential node situated on a hill that overlooks Umhlanga Rocks and the Indian Ocean. Much of the area was initially sugarcane land owned by the Tongaat-Hulett group. The area is made up of the corporate precinct and plush residential districts of the Umhlanga area. The Gateway Theatre of Shopping is located in Umhlanga Ridge, along with various other shopping centres, businesses and a private hospital.

The Umhlanga Ridge New Town Centre has attracted many professional, multinational firms to the region. It has been under construction for the almost a decade, with civil infrastructure costs amounting to approximately R200 million to date. While Umhlanga Ridge has seen remarkable growth over recent years, strict guidelines to development have ensured investors that no further development of the region will adversely affect their investment.

Area property information

Adrian Goslett, CEO of RE/MAX of Southern Africa, says that property in Umhlanga Ridge New Town Centre is almost entirely made up of sectional title units, with only 1.49% freestanding homes, which explains why sectional title units in the area are outselling freestanding homes by approximately 133 to one.

Goslett says that property prices in Umhlanga Ridge have remained fairly stable over the years, with current prices almost exactly where they were during 2007. He notes that in 2007 the average price of a freestanding home was around R11.142 million and a sectional title unit cost around R1.123 million. Today the average price of a freestanding home is about R10.432 million, while a sectional title unit is around the 1.055 million mark. According to Goslett, aside from a spike in sales seen during 2007, the number of sales transactions concluded each year has also remained more or less at the same level from 2008 until 2012.

Data from Lightstone reveals that consumers aged between 36 and 49 years old are responsible for approximately 36.6% of recent buying activity in the area. This same demographic also accounts for around 42.84% of the current homeowners and 33.75% of recent sellers. Another very active age group in the area are younger consumers between the age of 18 and 36 years old, who account for 31.37% of the recent buying activity.

Property price trends

Demand for property

Goslett says that nearly 60% of all homes in area sold between May 2012 and April 2013 were those priced between R800 000 and R1.5 million. Properties that fell within the R400 000 to R800 000 category represented 17.9% of the area’s sales, while properties between R1.5 million and R3 million represented 16.4%. He notes that around 7.5% sold during this period were sold for more than R3 million.

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