Ballito becoming the new Cape Town
- 17 Apr 2012
The migration of permanent residents from the country’s major cities to Ballito has doubled from approximately 12000 in 2005 to almost 25 000 in 2012.
“This is not surprising,” says Keith Brown, principal at Jawitz Properties, Ballito. “The North Coast of Kwa Zulu Natal is the new ‘Cape Town’ when it comes to property. It’s about a preferred location because of the many opportunities for business and local economic growth. The King Shaka International Airport continues play its part for easy access to KZN,” he says.
Investors wanting good yields and the influx of families relocating to enjoy the coastal lifestyle, are boosting the buyers’ market. Secure estates make up the majority of sales in Ballito as the properties are newer and security and quality of life are priorities.
Interestingly, the number of realistic sellers whose properties are priced in line with market demands has increased over the last couple of months. On the other hand, there are still sellers who ignore prevailing market price trends. Consequently, these properties remain on the market for a good twelve months and in some cases even longer.
“A well priced property will always sell first as buyers tend to be in touch with market conditions. However, many buyers discover they are unable to get the required bond and in many instances have to resort to renting. Statistics show that 80% of buyers with good cash deposits obtain mortgage finance easily. However, only 50% of those needing larger bonds are successful.
Admittedly, bond approvals have increased during the last 18 months, thanks to the banks’ more lenient attitude to lending. This is expected to continue for the remainder of 2012.
Construction is booming along the North Coast, as new developments mushroom in Ballito and Salt Rock. Sea Breeze in Mt Richmore, Salt Rock, is a case in point. Since the launch in December 2011, 40% of the units have already been sold. Construction is expected to start by the end of April 2012.
Demand for buying off-plan in gated-estates is increasing particularly among those who are looking to buy land and build their own homes. They, of course benefit from savings on transfer duty and end up with equity in their immovable asset on completion of construction.
The number of registered deals at the deeds office for 2011 was 157. So far this year, there has been a slight improvement on 2011 figures with the average sales price for the first quarter being up by 9%.
There is still an abundance of stock available ranging from R700 000 for small apartments going up to R50-million plus. The demand in the R1.8-million sales bracket is increasing, simply because of bond affordability in this bracket.
“The rental market is buoyant and the demand has driven up prices. Indications are that this will continue due to supply and demand. Many of the new developments are getting over 8% and upwards on rentals. Previously the return on rental income averaged 5%,” he says.