The demand for property in northern KwaZulu-Natal towns such as Dundee and Glencoe is holding its own, thanks to lower prices and diversification of the local economy.
That's the news from Anthon Raubenheimer, principal of leading local agency Homenet Raubie, who says that although coal mining was once the keystone of the local economy, it has now "taken a bit of a back seat, along with agriculture".
Tourism and administrative services have come to the fore and mining activities now only contribute 5% towards the local GDP, with agriculture contributing only 9,7%, he says.
Local and international demand for coal has tapered off in line with the economic downturn. Additionally, Eskom has yet to raise demand despite the energy crisis of last year.
"And yet the demand for local property has remained stable, with strict bank lending criteria posing more of a barrier to sales than any other factor."
Softer prices have undoubtedly helped, with sectional title apartments now starting at around R450 000 and freehold properties priced at between R550 000 and R950 000 - an overall decline of about 10% compared with last year that is encouraging for buyers and investors.
At the same time, the sizeable government contingent in the area is driving strong demand for rental accommodation, at an average price of R3500pm. The headquarters of the Northern KZN Administrative Services, the Umzinyathi Regional Council and the mega-district educational branch are all based in Dundee, Raubenheimer notes.
Meanwhile, the local tourism sector is booming. Northern KZN is known for its historical sites and the Talana museum which draws thousands of visitors a year and many shops, guesthouses and B&Bs have sprung up in response.
In addition, there is rising demand locally for retirement accommodation. Says Raubenheimer: "In fact a 20-unit sectional title development in Dundee for which we have the mandate has now changed its orientation and will become a retirement village. Prices are expected to start at R550 000."
ISSUED BY HOMENET