Umhlanga on the KwaZulu-Natal North coast used to be a small coastal village bordering on rolling hills of sugar cane with many large sprawling properties ideally located away from the hustle and bustle of Durban’s busy inner city.
Today it’s a thriving seaside town with a growing business district in Umhlanga Ridge that has still managed to retain some of its ‘village’ appeal, while offering home buyers all the conveniences of a live, work and play lifestyle.
Elwyn Schenk, Pam Golding Properties (PGP) area principal in Umhlanga says properties are highly sought after and in many instances tightly held. "The idea of living in a town with 320 sunny days a year and all the first world amenities is everyone’s dream.”
Schenk says the Umhlanga market proved to be resilient even through the economic downturn, with most properties holding their value well. “A new reality, however, arose for sellers and the ‘boom time’ expectations of the past gave way to more sensible price expectations given the buyers’ market which emerged and the banks’ lending restrictions.”
He says that the market is currently somewhat subdued, although sales are significantly up on the past three years. Apartments and town houses up to R3 million are selling well, especially with banks’ improved appetite for lending, says Schenk, while sales of houses in the R4 million plus category are proving more difficult.
This contemporary double storey home has five bedrooms, five bathrooms and 180 degree sea views. Designed by a top architect it offers open plan living areas with two pools, bar, gym plus a flatlet. It is on the market at R12.5m through PGP.
Conrad Vorster, Director at Engel & Völkers Umhlanga, says the market is very vibrant and they are finding that there is more demand from buyers for sectional title property.
Gareth Bailey Broker/Owner of the RE/MAX Address franchise says there are still a lot of able and willing buyers in the larger Umhlanga area prepared to invest in the area.
He says buyers are typically families because of the close proximity to schools, hospitals and other amenities.
Vorster says that buyers are attracted by the convenient location as well as the beachfront and range from young adults to the elderly. “About 15% are pensioners of 65 years and older, 40% are buyers between 50 and 64, middle aged buyers are around 28% and young adults about 17%.”
He says the price bracket that Engel & Völkers is seeing the most demand for is between R2 million to about R6 million. “The market stock is currently around 80.04% for sectional title and freehold falls in at around 19.96%.”
This residence in Umhlanga Ridge has seaviews, four bedrooms, four bathrooms and is priced at R6.9m through PGP.
Vorster says low prices are around R2 million to R2.8 million with mid-range properties priced between R3 million and R6 million, and the top end of the market seeing prices of between R6 million to R20 million and up.
Sellers usually get their price if the property is priced correctly, he says, but if a property is overpriced then it is more than likely that sellers drop the price in order to sell.
He adds that there is definitely still a demand for large, lavish and mansion-style homes.
The sectional title market, says Vorster, offers a very broad variety from studio apartments to beachfront penthouses and complex living. Apartments especially on the beachfront are popular, but Engel & Völkers do get a lot of inquiries on simplexes and duplexes as some clients would prefer a private garden as opposed to communal gardens typical of apartment blocks.
Most apartments offer three bedrooms and two bathrooms with open plan living areas and an open plan kitchen. “You do, however, have your lavish penthouses offering four to five bedrooms with multiple living areas.
This sea facing Umhlanga Rocks apartment has two bedrooms en suite and is priced at R4.8m through Engel & Völkers.
“For the typical three bedroom, two bathroom apartment you could look at anything from R1.8 million to R6.5 million, depending on finishes while penthouses can go for up to R30 million,” says Vorster.
He says older apartment blocks tend to be more spacious than some of the newer apartment blocks, especially the bedrooms and apartments range in size from 63sqm up to 700sqm for a penthouse.
Despite Umhlanga’s prestigious status both locally and abroad, says Schenk, quality homes can be acquired at relatively modest prices.
“One street up from the beachfront a two bed, two bath apartment in excellent condition can be acquired for R1.6 million.
“At the other end of the spectrum the spectacular Pearls development on Umhlanga’s main beach is offering apartments from R4 million to R30 million, the latter for a luxurious three-level penthouse with unending views,” says Schenk.
In the Gateway area, he says, PGP is seeing the most demand for two bedroom apartments either as starter homes or for buy-to-let investors and the most sought-after price range is between R1 million to R1.5 million.
Schenk says that in Gateway Newtown prices range between R700 000 to R3 million with around R1 million being the most popular. In Upper Umhlanga the range is between R3.5 million and R10 million, while beachfront properties range from R1.6 million to R30 million.
Demand for larger more exotic freestanding homes is muted, he says, but there is excellent stock available at realistic prices, significantly below new build cost.
This one bedroom apartment in Umhlanga Ridge is priced at R830 000 through Engel & Völkers. The building has a rooftop pool and entertainment area.
Schenk says sectional title units are consistently sought after with properties up to R3 million selling well while cluster homes are also popular, mainly because of convenience, privacy and the added security.
According to a PropIQ report analysing the 117 Umhlanga properties sold between January 2010 and July 2011 in the R500 000 to R10 million range and stand sizes between 500 and 2000sqm, the average price a property sold for in 2010 was R2 496 918 with 2011 to date showing the average sold price to be R2 308 992.
Rates should always be a consideration when buying into any area. Vorster says sectional title rates range from R1 200 to R3 000 per month, while full title rates range from around R2 000 to R4 500.
“Rates are obviously value related and the eThekwini rates randage is currently 0.9, which means that a R3 million property would bear rates of R27 000 per annum or R2 250 per month,” says Schenk.
However, he says, potential purchasers should be aware that the rates randage for vacant land is 3.78, which means that a vacant stand valued at R1 million would cost R3 150 per month in rates.
Schenk says that whilst the Umhlanga development market was also subdued during the downturn certain developers displayed their confidence in the area with the result that there are several mixed use projects on stream, scheduled for completion from early 2012.
However, he adds, the relatively few developments have exacerbated the shortage of rental stock.
On the rental front Schenk says PGP are seeing a substantial demand for rental properties and because few new developments have come to market, two bedroom, two bathroom apartments priced between R6 000 and R8 000 per month are in great demand.
“We have just concluded a rental for a three bed townhouse on Marine Drive for R20 000 per month and have a three bed which has just come available, on the beach for R20 000,” he says.
Vorster says rentals are extremely popular in and around the area but a lot of rentals are grossly overpriced and people tend to drop the rental amount as the property comes to a “standstill from standing empty”.
According to Bailey at RE/MAX rental stock is the major problem and anything above R15 000 is difficult to rent out.
Asked about crime in the area Schenk says that Umhlanga has traditionally been a very low crime area. “This is largely due to effective policing, supported by developing structures such as UIP (Urban Improvement Precinct) and other private or semi-private initiatives such as homeowners associations.
“These organisations partner with the municipality to optimise service delivery, with the objective of a cleaner, greener, safer Umhlanga,” he says.
So, is buying property in Umhlanga a good investment? Vorster says it is most definitely an excellent investment with the Umhlanga area a prime location that will remain so for years to come. “The market is showing growth and we have noticed some decline in prices, however, a lot of property owners are pushing hard to sell their homes for a higher price.”
The residential property sector’s performance, says Schenk, has been even more notable in the more upmarket areas such as Umhlanga and Umdloti. “In addition to being home to exclusive, luxury homes in prime coastal locations and with unique additional attractions such as Gateway shopping centre and King Shaka International Airport/Dube TradePort, these areas are underpinned by strong nodal growth in this strategic northern corridor.”
Schenk says the fact is that not only is property a resilient and reliable asset class, even in times of adversity, but that carefully selected property in prime areas can perform solidly despite a gloomy economic backdrop. - Julia Hinton
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