26 Jun 2007
Estcourt in the KwaZulu-Natal Midlands - an industrial town set on the Bushman's River - is one area where demand is far outstripping supply for both residential and agricultural properties.
Roy Emanuel, principal of the local Homenet office, says there are currently too few dairy or beef farms for sale between Howick and Harrismith to meet demand, and smallholdings between Nottingham road and Estcourt are selling at premium prices.
"The demand for farms and smallholdings is soaring - even though many of these properties are highly priced. This is partly because investors, who mostly come from Gauteng, are prepared to pay top prices as long as they can purchase a farm with lifestyle features such as birdlife, views and trout fishing."
Another factor affecting price is the limits that land claims are putting on supply around Estcourt. "A third of the area I used to operate in has land claims, which means I cannot sell the properties," Emanuel notes.
Thus a 640ha beef farm on the market for R2,5m recently sold within a week and most other well-priced properties are also being snapped up soon after they are listed for sale.
On the residential side of the market, Emanuel says there are currently only eight homes for sale in Estcourt. And while the market slowed a little in April and May, between October last year and March, well-priced homes were selling within a week.
Prices are also continuing to rise steadily. Homenet Emanuel recently achieved the record price of R830 000 for a home in Estcourt, which was bought by a local resident who was upgrading.
The entry level for property in the town has also moved up from around R250 000 two years ago to between R350 000 and R450 000, depending on area.
Meanwhile, the demand for flats is also high, and buyers who can find units stand to make a very good return, Emanuel says. Rentals for two-bedroom flats are currently around R2000 a month.
There is also a shortage of stock and also a dire shortage of vacant land for development that is underpinning capital growth. "Three years ago vacant land was selling for between R45 000 and R50 000 and the most recent sale of a stand was for R180 000."
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