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Seaside homes on KZN’s north coast

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16 Aug 2013

‘Home is your sandcastle’ is a headline that appeared in the UK Daily Mail recently. The author goes on to say that (UK) ‘seaside houses can be eye-wateringly pricey but they make for shrewd investments’. He adds that beachfront living still sways buyers, giving the example of a dilapidated home on Sandbanks (in the area of Poole, Dorset) which recently fetched a record price for the area of £1 725 per square foot, equivalent, according to the current exchange rate, to R276 000 per square metre. 

This Umhlanga home offers four bedrooms, three bedrooms, a built-in braai and forest and sea views. It is on the market for R12.999 million - click here to view.

Elwyn Schenk, Pam Golding Properties (PGP) area principal for Umhlanga and Umdloti on the KwaZulu-Natal north coast, says according to the Exeter office of UK property giant Savills, waterside properties with direct access to the beach are the most valuable. 

He says Richard Addington of Savills Exeter office reports that you can expect to pay a premium of up to 50 percent for these houses and although seaside homes usually come at a premium, they have the potential for sound investment acquisitions in the medium- to long-term. He says UK high street residential properties have bucked the trend over the past 10 years, increasing in value over this period by 63 percent, compared to a 30 percent return in the rest of the country. Even greater demand exists where there is direct beach frontage, yet the town centre is easily accessible. 

So how does this relate to our own coastline and specifically, on the sought-after KwaZulu-Natal north coast, he asks. "In this context, seaside homes are competitively and well priced and while prices per square metre can only be a guide, they are a reasonable basis for comparison.” 

This Umdloti home has five bedrooms, five bathrooms, a family/TV room and double garage. It is priced at R6.5 million - click here to view.

Schenk says in Umhlanga there are several properties located right on the beach. 

He says two notable examples of these are a freestanding, 520 square metre, four bedroom, four bathroom home in highly desirable Eastmoor Crescent, right on the beach and with direct access, which is priced at R14.5 million, which is equivalent to R28 000 per square metre. 

In Marine Bay, close to Umhlanga village on Marine Drive, a 581 square metre five bedroom, freestanding home in a gated estate with private beach access and a large sub-tropical garden is on the market for R21.5 million. This is equivalent to R37 000 per square metre. 

“Both homes require some modernising and updating but even allowing 10 percent of the purchase price for this, the price tags are attractive, with little or no premium for their position on the beach or their convenience to the village with its numerous restaurants, shopping facilities and other attractions and amenities.” 

This home offers three bedrooms, four bathrooms, a swimming pool, garden and double garage. It is on the market for R9.8 million - click here to view.

In comparison, Schenk says apartments in the area, also on the beach, many with direct beach access, would expect to fetch between R30 000 and R40 000 per square metre. The benefit of proximity to Umhlanga village is that almost everywhere, including the beach, is a short walk away while with Gateway ‘Theatre of Shopping’ it is a few minutes’ drive. Given the above, a luxury residential complex like Beacon Rock, selling off plan and located just one street from the beach represents excellent value at around R22 000 per square metre. 

So Umhlanga ticks all the boxes according to the ‘home is your sandcastle’ definition, says Schenk, and at surprisingly modest costs. In fact, he says someone who owns property in the Cape and KwaZulu-Natal frequently comments about the excellent value which Umhlanga represents, by whichever measure. 

Having just returned from a trip overseas, Schenk says he has been struck by the renewed interest in property as an investment medium and there has been a strong uptick in values in certain areas of the UK and the United States. 

He says there is a feeling among some analysts that quantitative easing (QE) has released the tension in the key financial markets (Greece, Portugal and Spain being exceptions). However, for some QE is the ‘medicine which will become the poison’ because of the inflationary effect of printing money with no concomitant increase in value of the real economy. For many, the best hedge against inflation is ‘hard assets’ especially fixed property, which, unlike gold, is an income generating asset. 

“Whether you’re a first-time buyer or seasoned investor, quality property, especially on the coast, is worthy of strong consideration. Successful businessman, Warren Buffett has said, ‘to build long-term wealth, you must buy and hold real estate’,” says Schenk. 

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