Have you ever looked at an area wishing that you had invested in its property market five years ago when property there was more affordable? Below Seeff’s experts elaborate on the areas in KZN that were good investment spots a couple of years ago and name the suburbs they believe are hot investment areas right now.
Graham White, Sales Director at Seeff North Coast, says the property market on the North Coast has been so buoyant over the past five years; it is difficult to determine exactly where the hot spots were.
“As a region we were in a "hot spot bubble", but if I had to single out some of the “hottest” areas it would probably be the Simbithi Eco Estate and Palm Lakes Estate - both gated developments.
Simbithi offered great lifestyle living and was priced below the other premium estates North of Durban, while Palm Lakes Estate was a "dark horse" that also offered great value even though it was slower to grab the attention of the market due to being perceived as being "further out" from Ballito .
In Simbithi two freehold units that were priced at R5.75 million and R6 million four to five years ago, sold for R6.95 and R7.5 million respectively in 2019. Sectional title here was priced at R2.75 million four to five years ago and sold for R3.95 million in 2019 and while vacant land was priced at R2 million, today it fetches R3.5 million.
In Palm Lakes freehold property of around 200m2 was priced at R1.650 million four to five years ago and sold for R2.850 million in 2019. Sectional title units on around 90m2 was priced at R800 000 and sold for R1.350 million in 2019 and while vacant land was priced at R400 000 today it fetches R750 000.
Other gated estates and beach front and/or sea view sectional title units also offered great opportunities and offered highly sought after choices as families moved into the area”.
White adds that the entire gated product in Ballito has shown very good returns for buyers.
“As estates matured and reached the end of the building phase they increasingly commanded good prices and buyers who could see past the "building/development" stage have definitely been reaping the rewards.
Sectional title properties closer to the beach have also shown good returns in terms of short term rental income - particularly those that have been revamped and present well”.
White continues that current hot property on the North Coast will consist of new developments currently being launched north of Salt Rock and Sheffield.
The Palm Lakes and Tinley Manor area is also under the spotlight with the announcement of the Club Med Resort development in the area.
Free standing property in areas like Ballito, Chaka’s Rock, Salt Rock and Sheffield Beach still offer some great options and incredible value.
Generally, from a South African property market perspective, the entire North Coast is a "hot property" market right now.
While we are not immune from the effects of the economic and political vagaries, the sentiment that supports the growth in the area is well underpinned by fundamentals that drive people to an area - lifestyle, climate, good schools, medical facilities and airport connectivity amongst others”.
Gregg and Michele Wilson, Seef’s Principals in this area, say the Upper Highway area is thriving as a result of on-going multi-faceted development that has increased the sales tempo to a dramatic 65%.
Hot property here five years ago was that of the launch of large apartment type developments.
These apartment type developments - Emberton Estate and Cotswold Fenns -targeted the investor and young first time buyers at a starting price of R1.2 million without transfer costs and are now selling at R1.6 million.
Ongoing development that was launched in the last four months include Kings Gate Estate feeding the trend of providing entry level properties to our influx of buyers interested in the just below R1 million to R1.3 million property price range.
Major retail players including VW Alpine, Hyundai, Nissan, Toyota, Jaguar and Landrover are flocking to the area and we have also recently introduced the Hillcrest Private Hospital and the sub-acute step down facility which provides valuable social service to our residents and job opportunities.
Four Woolworths outlets as well as a Virgin Active Health Club have also recently been introduced.
The Upper Highway area has seen many new first time buyers enter the market in significant numbers with statistics showing 44% of all sales made in the last six months being apartment sales in two price categories being either below R1 million or between R1 million - R1.5 million.
The Upper Highway area is predicted to thrive in growth in the next few years and will continue to feed the youth in education at our private schools including Kearsney, St Mary’s, Highbury, Waterfall College, Curro and many more.
Sibongile Ngcobo, Principal at Seeff Pinetown, says hot property here five years ago consisted of two and three bedroom sectional title units and new developments.
“People who invested in these property types are being rewarded now as there is a major rental demand for sectional title apartments". Securing a rental property between R5 000 and R6 000 per month is not easy due to the demand.
Investors who bought five years ago are enjoying a good rental yield and this is expected to continue for the foreseeable future”.
Both sectional title property and student accommodation are experiencing good return on investment”.
These property prices have also escalated in Pinetown in the last five years.
Ngcobo adds that the demand for sectional title properties in the R500 000 to R800 000 price range continues to be sky high for people entering the market.
There is also a major demand for student accommodation in Pinetown, many buyers are converting their homes into student accommodation.
“Try to invest in properties next to universities and schools as the demand for student accommodation is only expected to increase further.
Pinetown offers a major opportunity to seasoned investors and entrants into the property alike as it is characterised by a fast turnover with a lot of activity”.
Jan Vermeulen, Principal at Seeff Queensburgh, says hot property here five years ago consisted of two bedroom simplexes on 63m2 with single garages.
“These units sold for about R 520 000 on average and now five years later the average selling price is R 790 000 with rental incomes of around R 6000 per month!”
New developments priced between R 1 200 000 and R 1 400 000 with three bedrooms and lock-up garages are in great demand at the moment. The buyers who invest here are generally upgrading from apartments or smaller simplexes, but still want the security of complex living.
Buyers and investors buying in Queensburgh should look at buying two or three bedroom flats or simplexes.
The rental market is showing great returns and the bond repayments of two and three bedroom simplexes are often covered 80% - 90% in year one with increases of between 5% and 10% for year two and three.
Homes increase in value of between 4% and 7% year on year in the Queensburgh area on average.