|The population of the Dolphin Coast town of Ballito which stood at 3 000 permanent residents in 1986, has quadrupled at least since then, and according to Horst Keil, principal of Realty 1 International Property Group in Ballito, shows no sign of slowing. |
This is in spite of the local property market taking a breather after two years of frenetic value growth that swelled average house prices from between R450 000 and R750 000 to up to R2.5 million.
With 80 percent of the development units sold last year not yet out of the ground, and huge interest from developers in large stands with development potential, Ballito is on the verge of a population explosion, Keil says. “Hundreds of plots have been sold in developments such as Simbithi, Dunkirk, Brettenwood, Seaward and Zimbali, where owners have three to four years to build, so there’s a huge amount of building on the cards.”
Attributing the town’s growth to a combination of factors, including its proximity to Gateway and La Lucia Ridge, which has become one of the province’s major economic belts in the last few years, Keil says the nature of the town has changed from a seasonal holiday destination to an increasingly popular permanent destination.
This is also confirmed by Denise Bowditch, manager of Homenet Ballito, who notes that the huge market peaks and troughs that are typical among popular
holiday destinations are now levelling out in Ballito as it gains more and more
Keil says with the influx of people to Ballito, it’s no longer a feast or famine situation for local business anymore. The entire vibe of the town has changed. With 22 restaurants and two new and large shopping centres, it has become an established town in its own right now, with a holiday component.”
Growth is being further fuelled by the hype around the building of the Dube Trade Port and King Shaka International Airport, due to open in mid-2009 which, he says, is already creating opportunities for commercial and light industrial business in the area.
And now that Ballito has schools and colleges such as Crawford and Seaforth close by, Bowditch notes, there is another motivation for those who own holiday homes in the town to relocate permanently. There are also plans afoot for Umhlali Primary, the local government school, to be expanded to incorporate a high school and this should be completed by mid-2007.
While residential market activity has eased in the last few months mainly due to buyer resistance to over-pricing, there is still huge demand for well-priced stock, particularly in the R1,2 million to R1,8 million price range. “The escalations of the last two years have encouraged sellers to price their properties adventurously. Many of them are not serious about selling because it’s their second home so their attitude is to wait until they get their price or they just won’t sell. On the other hand, buyers are refusing to pay excessive prices and will rather wait until they can find something that offers them value for money,” says Keil.
Value means different things to different buyers. Those in the R2 million plus category tend to be local family buyers who want spacious three or four bedroom houses with sea views, he says. Top-end-of-the-market purchasers are very often foreign investors with up to R18 million to R20 million to spend. According to Keil, they are prepared to pay for luxury, beachfront positioning while being only a couple of hours away from top nature reserves and all-time favourite holiday destination, the Drakensberg.
“Prices may seem to have risen fairly steeply in the last couple of years,” says Keil, “but one must remember that coastal properties have always been undervalued compared with Cape Town prices. Essentially, we’ve just closed the gap a little but we’re still lagging well behind places like Knysna, the Garden Route and parts of Cape Town, where you can pay up to R45 000 per square metre. Here, top dollar is in the region of R20 000 m2 for something spectacular.”
Describing Ballito’s market as being in a steady and sustainable growth phase, Keil says the amount of money flowing into the country’s coastal areas is mind-boggling with strong investment confidence in the future popularity of its location.
This, says Keil, had been underlined by the recent record price achieved for a 350 hectare farm north of Ballito. The land had been bought by a Johannesburg consortium for a reported R190 million, which, he said, is believed to be the largest single commercial auction in South Africa.