Anyone who has spent any amount of time flipping through the property section of a newspaper or online news portal is likely to have seen at least one article mentioning the enormous growth potential surrounding the North Coast of KwaZulu-Natal.
The question is, how long will it take before property prices grow to match the level of development in this region?
“In the RE/MAX National Housing Report for Q4 2018, KZN claimed two of the top five positions for the most searched suburbs on remax.co.za (La Lucia placed second, and Durban North fifth), which alludes to rising interest in the province. However, according the Private Property statistics supplied to us for our monthly newsletter, the change in median asking price has seen steady but slow growth over the last number of months. Also, according to Lightstone’s latest Residential property Indices Report, house price growth in the Ethekwini Municipality has remained stable but below the growth curve for City of Cape Town and Nelson Mandela Bay Municipalities for the 2017-2018 period. Market data reflects the reality that, although the region has gained interest from property portal searches and from a media perspective, it is still too early for the ongoing development in the area to have increased property values just yet,” explains Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett.
Grant Gavin, Broker/Owner of RE/MAX Panache operating in Durban North and La Lucia, explains this reality in terms of simple economics – supply and demand. “On the supply side, we are seeing a lot of new homes coming onto the market, in part owing to the many new developments which seem to be selling very well, but also largely owing to economic pressure and uncertainty homeowners are currently experiencing, as well as emigration. On the demand side, we have a slightly depressed market with buyers holding back for the time being. The trend in these markets is for downward pressure on asking prices, which explains why our current market has yet to show signs of house price growth. House price growth will only take root once the demand outweighs the supply, which is unlikely to happen within this year. It seems likely that price growth should be fairly flat, certainly for the first half of 2019, in line with previous years,” says Gavin.
“That being said, I do still believe that the North Coast is a hotspot for future growth in the province – and not just around Umhlanga and Umdloti, but further north too. If you look at what has been developed in Umhlanga, Cornubia, and in Ballito, one can see why the trend of people moving further north is set to continue. With strong demand for north coast living likely to stimulate longer term price appreciation, it would therefore be wise to get in early before house prices in these areas begin to climb in the years to come. Now really is a great time to buy,” Gavin concludes.