While property markets in certain parts of the country are beginning to show strong signs of recovery, other areas are still feeling the full effects of the economic downturn.
As with many of the smaller coastal towns in South Africa, property prices in Zinkwazi on the North Coast of KwaZulu-Natal boomed during the upturn as more and more people invested in second homes. Unfortunately, the adage ‘what goes up, must come down’ has particular resonance in this instance. The property market in the town has borne the full brunt of both the recession and the subsequent economic fallout and properties are selling for a fraction of the prices paid in 2010.
This little seaside town, which lies approximately 80km north of Durban on the idyllic Dolphin Coast, is bordered by pristine beaches and is flanked by a nature conservancy and lagoon. Taking its name from the Zulu word for the white-headed fish eagle, the area is filled with indigenous bird life, tropical palm trees and beautiful scenery to the north and south.
Part of the attraction for those investing in this somewhat off the beaten track area, is the multitude of unspoilt beaches the region offers. Sea views are spectacular and the quieter and more laid-back lifestyle doesn’t harm the town’s reputation either.
Zinkwazi beach and lagoon
Generally speaking, however, living in paradise comes at a price and although there are plenty who are willing to pay a premium for the privilege during good times, things change during a slump.
There has been a steady decrease in property sales in the area since 2004 when Lightstone’s statistics reflect that 86 properties changed hands. Last year’s figures indicate that only 23 properties were sold and that the drop in numbers has had a drastic effect on price averages achieved.
The data reveals that the price paid on average for a freehold property in this hamlet has declined by almost R1-million since 2010 while the sectional title average has dropped by only R200 000.
It is, however, worth noting that even though prices have dropped considerably, owning property in Zinkwazi will still make a fairly substantial dent in your savings account. The average price paid for a freehold property in 2011 came in at R1.845-million, with the sectional title average reflecting at R1.550-million. Equally interesting is that 55 percent of property sold in the last year changed hands for more than R1.5-million, indicating that the area is still attracting those who are prepared to invest a substantial amount of money in this coastal oasis.
Perhaps the biggest drawcard is that while property sales may not be booming at present, overall, the area has an enormous amount to offer. Everything, it seems, is virtually on the town’s doorstep and given the rate of commercial and residential development to the north of Durban, it won’t be long before property prices in the area start to reach new heights.