|Land values on the KwaZulu-Natal north coast have exploded some 1 000 percent in the past decade, but the area still remains abundant with further opportunity. |
Zimbali Coastal Resort sales and marketing manager Andreas Wassenaar says houses in the development are being sold for R13 000 sqm, while building costs have nudged the R7 000 sqm mark. Penthouse developments in the Umhlanga area, he says, are in some cases exceeding R20 000 sqm.
He believes new developments are being launched off-plan for around R14 000 sqm, but deals at R10 000 sqm are still available. This comes as the property market continues stabilising and house price increases look set to level off in the 9-18% range against the 40% achieved in 2004.
Wassenaar says there remains a shortage of good property stock across all suburbs, while the demand for accommodation remains strong.
Zimbali has recently launched the last 150 plots in the coastal resort to the market with land selling between R1m and R2,65m and averaging R1,7m for a 1 500 sqm plot. Wassenaar says central to the Zimbali developments – including the three newly-launched ones of Bona Bali, eBuhleni at Zimbali and Imbali Lakes – is the philosophy for an investment in harmony with the environment.
Wakefields estate agents CEO Keith Wakefield says several upmarket areas recorded single digit price increases earlier last year. Yet, KwaZulu-Natal property prices have lagged the rest of the country and with buyers not prepared to pay unnecessarily high prices, the province – and the north coast – remains competitive investments.
Wakefield and movie entrepreneur Anant Singh are members of a development group that have brought the Pearls of Umhlanga to the market, a R1,6bn Dubai-style luxury residential and retail project. Positioned on the beachfront, the first of three phases was sold out in six weeks and drew almost R400m in investment when launched last year.
Wassenaar says the take-up reflects the strength and growth potential of the KwaZulu-Natal north coast, particularly as developers expand further along the coast. That confidence is further enhanced in the commitment by international group Fairmont Hotels & Resorts to manage the US$250m Zimbali Fairmont project.
The Canadian-based group will enter the local market via a strategic alliance with IFA Hotels & Resorts, the joint venture partners and co-developers with Moreland of Zimbali. IFA Hotels & Resorts are separately listed on the Kuwaiti stock exchange with a market capitalisation of more than US1,3bn and set to finalise their JSE listing shortly.
The Zimbali infrastructural development, over the past 24 months, says Wassenaar amounted to R250m – spent on new roads, sewerage and electricity and over the same period more than R400m in new land sales within Zimbali have been recorded. Last year Zimbali resales touched R180m.
Wassenaar says that Zimbali broke a KwaZulu-Natal record two years ago when a beachfront stand was sold for R4,05m. The stand has since been resold for R5,65m, while last December three more beachfront sites hit the market for R7m a piece.
Research shows that investments along the KwaZulu-Natal coast remain the dominance of Gauteng buyers, reflecting the market demand for second homes and future retirement houses bounded by lifestyle living, security and investment growth.
More than 65% of sales in both Zimbali and the Pearls in Umhlanga were concluded with people from Gauteng against 25% from KwaZulu-Natal, 10% from the rest of the country and the difference from international buyers.
Wassenaar expects foreign ownership to grow in line boosted by international marketed from IFA and Fairmont. The area has already received interest from UK, German and Dutch buyers and several British investment companies are scouting the northern KwaZulu-Natal coast for sound developments into which funds can be invested.
He says strategic alliances with key property investment companies and estate agent and the legal fraternity are in the pipeline.
Changing the focus, the Hawaan Forest Estate in Umhlanga, launched in 2004, has sold more than R30m in sites, predominantly to Durban and Umhlanga residents opting to move into the estate.
Wassenaar says Zimbali has experienced growing interest in the area from the Internet. Although few people purchase a site or home unseen, the internet has become an increasingly valuable research tool.