Coastal holiday home market remains buoyant

The market for holiday homes in KZN has perhaps never been so buoyant as wealthy Gautengers and other inland buyers look to the region for that dream home in a sub-tropical climate, or the proverbial "cottage at the coast".

That’s the positive picture painted by the ERA Unique group, which is well represented in the major KZN centres and is therefore well placed to gauge overall trends.

Most ERA Unique offices say a shortage of quality holiday home stock is their biggest problem while demand continues to be underpinned by low interest rates and investment prospects.

A common theme in their comments is that there is now only a brief window of opportunity to acquire good holiday home property at affordable prices in the province.

Demand continues strongly in most areas across the price brackets, ranging from sectional title units to apartments and freehold homes. Moreover there is a widespread mix of buyers with locals being prominent while Gautengers are definitely back in numbers.

On the KZN north coast the holiday home juggernaut retains good momentum with new developments finding a generally eager market, says ERA Unique's Shane Pearson.

“New developments are helping to ease the stock shortage to some extent and the market is strongly underpinned by widespread demand from buyers who see that values still have further potential to increase.

“But while north coast centres such as Umhlanga and Ballito have been the holiday home meccas of the last few years, the south coast – and notably centres such as Uvongo, Southbroom and Amanzimtoti – is coming into its own now. South Coast holiday homes, typically comprising two bedrooms on a good position are still available at less than R1-million.”

Overall, Pearson says, the rental market is doing well with rentals of holiday homes on the north coast during peak season realising R1 000 to R1 500/day and those on the South Coast reaching R700 to R800/day.

“Interestingly, apartment development are coming to the fore again, on both the north and south coasts, but now with the emphasis on harmonious designs that maximise living space and of course, security.

“In addition a different sort of upmarket apartment living is beginning to emerge, epitomised by the trendy new blocks in the Point precinct in Durban, where penthouses have reportedly sold for more than R4-million.

“Generally, though, apartments offer a lower entry cost than freehold homes, with a modest unit on the South Coast probably costing around R600 000, going up to over the R1-million mark in Ballito, for example.”

On the retirement home front, he says, there is a serious dearth of stock. Most of these developments are to be found in the so-called ‘highway’ areas, the likes of Hillcrest, Pinetown and Westville, but there are few re-sales and little in the way of new development, a major problem being lack of suitable land.

“Accordingly, we believe there are enormous opportunities for developers in the retirement village market as KZN is increasingly sought after in this respect by up-country folk, as well as locals wanting to leverage value from their large homes and downsize, leaving themselves with some change for investment.

“As for development in general, KZN is the proverbial hive of activity. Golf and eco-estates are proliferating all over the province, there’s apartment development and security estate development aplenty, some of it on previously farmland and caneland.

“Examples are the Gowrie Farm Fly fishing and golf estate near Nottingham Rd in the Midlands, a craft orientated development on the cards for Estcourt and the Simbithi eco-estate outside Ballito, where a mix of freehold and other property types is under way.

“Some idea of the pace of development is that the number of plans passed for new homes in KZN jumped by more than 400 to 2 543 in the first quarter. And this came on top of a 78 percent year-on-year increase in the number of homes actually completed“.

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