22 Feb 2013
In 1976, one could buy a basic three bedroom house in Estcourt for R14 000 and an upmarket home in the best suburb for R28 000.
According to Emanuel, who has run a successful real estate practice there for the last 37 years, one can buy a decent family home for under R600 000 and a quality home in the best areas for less than R1 million, value not easily matched in the bigger towns and cities.
On the back of its strongly performing agricultural and industrial sectors, Estcourt’s property market has held its own during the countrywide real estate slump, with demand consistently high in the R500 000 to R800 000 price range, he says. He’s also dealing with serious buyers wanting working farms and prepared to pay anywhere from R4 million to R20 million, though these are in short supply at the moment.
The credit crunch has affected the local property markets lifestyle sector. Historically supported by holiday home buyers from Gauteng, as well as those with children at private Midlands schools, Emanuel believes the lack of big city interest in this market in the last three to four years is because people can no longer afford to buy and maintain two homes. These properties, often big farm houses on grounds large enough for horses and even some livestock, are to be found in the Midlands between Estcourt and Howick, and range from R2.6 million to R4.5 million. However, with the area’s temperate year-round climate and water sport-friendly dams as well as its proximity to the popular Weenen Game Reserve and Pietermaritzburg, Emanuel is expecting a turnaround in this sector as the world’s financial fortunes improve.
On the local front, Drakensview is Estcourt’s most sought-after residential suburb. Characterised by an abundance of prime homes, views of the Drakensburg Mountains and proximity to schools, it offers excellent value. This is evidenced by Emanuel’s most recent sale there, a four bedroom, two bathroom renovated house with a garden, which was sold for R900 000. By and large, the property market is being driven by people upgrading to better areas and bigger homes, as well as transfers in and out of Estcourt, he says.
In a classical case of limited supply driving demand – the result of the high cost of building in the town - the real estate is poised for good value growth, he believes. “There’s an ongoing shortage of stock in all categories. The problem is that building here is expensive and therefore not financially viable for developers, who can’t achieve the returns required to service their bonds," he says. Many of their prospective buyers come from previously disadvantaged backgrounds but poor credit records in some instances disqualify them from obtaining home loans. He says even when they’ve rectified the problem, they are unlikely to qualify for a bond of more than 80 percent, which limits their ability to buy property. "It’s a challenge for the average Estcourt worker to find a 20 percent deposit on a R600 000 home, which translates to about R120 000.”
As a result, his rental division is thriving, and he has a waiting list, particularly for properties in the lower and middle price brackets.
Emanuel also reports heightened activity in Estcourt’s commercial sector. One of KwaZulu-Natal’s oldest towns, it is the largest commercial centre in the Midlands region, boasting a number of blue chip companies. These include Eskort Bacon, Nestlé, which is undergoing a multi million rand revamp, and Pick ‘n Pay, which is moving into the CBD in April. There’s also talk of a private hospital being built in the town in the near future, he says. In addition, Estcourt Prison is undergoing a R2.3 million overhaul, a water reticulation extension is nearing completion in Wembezi and road upgrades are taking place in the rural areas.
Estcourt’s hospitality industry is showing good growth on the back of a steady stream of contractors to the area, says Emanuel. “Not one of the town’s B‘nB’s has a bed available at the moment,” he says. He therefore welcomes the latest edition to Estcourt’s guest house portfolio, a 90-year old, double-storey with Oregon and Yellowwood floors, doors and sash windows, which he sold five years ago. The owner, who has renovated it to its former glory, will be opening its doors officially on 22 February.
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