14 Sep 2011
The KwaZulu-Natal property market is said to be very active with some greedy sellers overpricing their homes, but still buyers are are finding bargains.
Estate agents say there are still a number of stubborn property sellers who overprice their homes forgetting that buyers are quite knowledgeable about pricing these days.
However, serious sellers in some of these locations are pricing their properties in line with the current property market, and as a result, they are being snapped up as they enter the market.
Kim Woods, manager and co-licensee of Seeff Berea says it is definitely a buyer’s market and sellers should consider pricing properties correctly and in line with the market to ensure a successful sell.
“Although we still face a really difficult market, with banks' lending rates still not an item to get excited about and many people being cash-strapped, the major key to selling a home in Berea is correct pricing,” she says
To illustrate this point, she says her agency sold 11 properties within 10 days of listing because the sellers listened to the agent about pricing their houses correctly for this market.
These properties were priced between R575 000 and R2.2 million, proof that even in a tough market, when priced right, a property will sell, she says.
“Sellers must realise that buyers are well- educated about prices, since they shop around and view many properties before finding the right one. “The longer a house sits on the market, the lower the eventual price achieved, due to the perception that the house is overpriced.”
Woods explains that statistics show that buyer interest in a property wanes after four weeks of it being on the market. The critical time to price correctly is right at the beginning.
Reduction in prices often demonstrates an element of desperation, while overpriced properties can often be on the market for over a year, finally selling at less than the original price given by the agents.
“It is still a buyer’s market as there is ample stock for buyers to choose from, but priced correctly, a property will sell,” he says.
He says the banks home loan approval ratio has increased significantly hence the renewed appetite for property from buyers and savvy investors.
Umhlanga Rocks is said to be one of the most sought after areas in South Africa for property investment.
Sectional title units in Umhlanga continue to sell rapidly and maintain their value. These are priced from R750 000 to R28 million, with many buyers looking at the R1.5 million to R2.5 million range, he says.
“There has been massive development taking place in and around Umhlanga over the last 10 to 15 years and the property market has performed well and proved to be very resilient.”
Meanwhile, Pam Golding Properties (PGP), reports a shortage of beachfront properties and more retirees and young buyers entering the KwaZulu-Natal property market.
Elwyn Schenk, PGP area principal says there is very little stock coming onto the market in the scenic and sought-after Umhlanga Rocks beachfront properties.
New stock is expected to come into the market in the next three to five years and he says existing properties will start to see a strong uplift in prices.
“The opulent ‘Dubai-style’ Pearls development, right on the main beachfront and comprising a mix of luxury apartments, duplexes and penthouses, has proven an extremely sound investment with values having more than doubled since launch just five years ago.”
He says for many people Umhlanga is a close second to the Cape’s Atlantic Seaboard as a highly desirable area in which to live.
From a property value perspective this is reflected in property prices - while luxury homes can fetch upwards of R40 million on the Atlantic Seaboard, in Umhlanga top apartments can be acquired for less than half that amount.
From a quality of life consideration, Umhlanga is a close rival for the top spot – a viewpoint shared by many locals who would argue it is preferable given the year round exceptional climate,” says Schenk.
The effect of the global economic crisis in more affluent areas of South Africa such as Umhlanga was even more muted and prices remained relatively flat.
Serious sellers had to be more realistic in their pricing aspirations which meant that in such instances asking prices were adjusted according to market conditions, he says.
Schenk says predictably the most sought after apartments are on the beachfront. Along Marine Drive in the south are established complexes such as La Lucia Bay, with units affording direct access to the beach, and priced from R7.5 million.
Close to Umhlanga village is a cluster of four high rise apartments adjacent to the 5-Star Oyster Box Hotel, now world famous for hosting a spectacular reception for the newly-wed royal couple of Monaco.
Within this grouping of high rise apartments a multi-level penthouse at Oyster Quays is on the market for R18.9 million. Smaller apartments in the same complex start from R5 million for a two bedroom unit, says Schenk.
Barbara Becker, area principal for PGP says there is a growing demand for accommodation among retirees concerned with being cared for than proximity to cities or airports.
Howick offers excellent retirement facilities with enough stock to meet demand. Pietermaritzburg and Hilton are experiencing a serious shortage of property stock as development costs have inhibited new developments in recent years during the economic slowdown, she says.
“In Pietermaritzburg we are seeing an increase in young home buyers aged 25-45 years age and emerging market buyers, particularly single mothers.”
The latter place a high priority on secure homes in gated developments, and also prefer to have additional parking available for guests and buy properties priced between R550 000 to R1 million.
“In the Hilton area the popular price range for homes is mainly between R1.2 million and R1.6 million.”
Buyers are mostly aged between 30 and 45 and are young professionals and business people, as well as government employees. They prefer open-plan living areas with fairly large, level gardens with a country feel and if possible, scenic views.
A development which remains popular among such buyers is Garlington in Hilton with its gated security as well as guards on horseback.
Plots in Garlington are priced from R350 000 while homes range from R2.7 million.
“Garlington attracts buyers who are young, up and coming, career-oriented people who lead busy lives and want a secure location for their families.”- Denise Mhlanga
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