19 Mar 2012
The value of home loan applications increased by 48 percent in February compared to the same period last year, according to ooba.
The bond originator reports that this was the best monthly performance recorded since March 2008.
Saul Geffen, chief executive officer of ooba says the value of approved home loans has increased by 32 percent year-on-year (y/y).
“We have not seen these levels since May 2008, but these figures are still 30 percent of the value recorded in May 2007.”
He says that the average approved bond size also increased by 10.9 percent to R 738 835 in February 2012 from R 666 124 a year ago.
Geffen expects growth to continue to be driven by ooba’s increased market share as well as organic growth from the improved property market and lending conditions.
He says that interest rates, subdued property price inflation and relaxed deposit requirements has resulted in an influx of applications from potential homeowners.
In Amanzimtoti, the biggest driver of this activity is news of Transnet’s R100 billion plans to turn Durban’s former international airport into a new dug-out port, says Deidre Ronnenberg, owner of the local Aida office.
The anticipated increase in local property values as a result of this development and demand for long-term rentals is attracting a number of investment buyers and many of them are paying cash.
She says another driver of property sales in the South Coast is that real-term property price growth is expected to turn positive soon.
According to the latest figures by Absa, although they were coming off a low base, home prices on the South Coast rose by 7.5 percent y/y in the last quarter of 2011.
Ronnenberg says many retirees, holiday home buyers and investors now believe that the local market has passed its bottom and are keen to secure property before the upturn gains much more momentum.
Budget-conscious KwaZulu-Natal buyers are increasingly choosing to live permanently on the South Coast where prices compare very favourably to the residential areas north of Durban.
As an example, she says in Amanzimtoti, one can still buy a spacious two bedroom beachfront flat with a garage for around R650 000.
Freehold homes are priced between R700 000 and R1.3 million while luxury homes, some of them suitable for the bed and breakfast establishment are priced around R3 million.
“At the moment we are also seeing many people buying homes here that will accommodate their parents for now and themselves in the future when they retire.”
The area is also attractive to buy-to-let investors because both holiday and long-term rental properties are always in demand.
Prices for two bedroom homes in established retirement villages along the lower South Coast start from around R750 000, while two bedroom apartments and townhouses suitable for letting or as holiday homes are priced from R600 000 and R700 000 with a seaview.
The achieved prices were typically only 8.7 percent below the asking prices, an indication that the area is in demand and less affected by the so-called downturn than most Cape Peninsula suburbs, says Tony Clarke, managing director of Rawson Properties.
Freestanding homes in Bergvliet are priced between R1.4 million and R3.4 million, in Meadowridge from R1.3 million to R3 million, at Diep River from R400 000 to R2.5 million, at Plumstead from R850 000 to R2.5 million, at Southfield from R500 000 to R1.1 million and at Heathfield and Alfindale from R380 000 to R1.8 million.
Ongoing demand attracts property investors and those buying in the less expensive areas such as Southfield can now achieve a 7.5 percent nett growth from day one, says Rawson Properties.
Homes that have been renovated in these areas tend to achieve good returns.
Rawson Properties adds that buyers looking to buy in a reasonably priced area with the ability to withstand almost any economic downturn can look to Bergvliet and its surrounding areas for value in the long term. – Denise Mhlanga
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