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Luxury home prices drop in KZN North Coast's Zimbali estate

20 Nov 2019

Price resistance is showing signs of cracking in the R10 million to R20 million price bracket in Zimbali Coastal Resort and Estate, KwaZulu-Natal.

The listing price of this home in Zimbali Coastal Resort and Estate, Ballito, has been reduced from R16.95 million to R13.95 million. The home has four bedrooms, four bathrooms, koi ponds and pool deck - click here to view.

With the high end of the residential real estate market typically resisting price reductions, the volumes tend to plummet when faced with a decrease in the demand, says Andreas Wassenaar, Seeff’s Licensee and Principal in Zimbali.

This is what Zimbali Coastal Resort - the best example of the high-end residential property market in KZN - has experienced over the past two years, says Wassenaar.

Zimbali has 1 300 homes with over 100 of these in the R30 million plus bracket and over 250 being in the R20 million to R30 million range. Conservatively there would be 500 homes priced in the R10 million to R20 million range.

This home in Zimbali Coastal Resort and Estate, Ballito, offers four bedrooms, four bathrooms, a private bar, courtyard, pool and patio with sea views. It is on the market for R13.5 million - click here to view.

The price bracket above R20 million has seen sharp price reductions over the past 12 months. What was typically priced at R35 million has been reduced to R30 million and what was priced at R25 million is now closer to R20 million.

However, he says the larger price bracket between R10 million to R20 million has been slower to adjust - until now.

“In a recent string of price reductions, Seeff Zimbali has reduced pricing on some of its key mandates within this bracket on the instruction of the sellers.”

This four bedroom, four bathroom home in Zimbali Coastal Resort and Estate, Ballito, offers sweeping views of the forests and lake. It is on the market for R10.8 million - click here to view.

Wassenaar says some perfect examples of these reductions include a property that has been reduced from R16.95 million to R13.95 million; a home that was reduced from R12.95 million to R10.95 million and another one that was reduced from R15.95 million to R13.95 million.

New listings are tending to start their life on the market at more aggressive pricing - understanding where the market is currently at - and therefore aiming to get the pricing right from the outset on the agent's advice.

“The higher-end residential market is characterised by property owners that are rarely under financial pressure to sell and therefore would typically decide to keep pricing unchanged and simply not sell,” he says.

This four bedroom, four-and-a-half bathroom home in Zimbali Coastal Resort and Estate, Ballito, offers a jacuzzi, pool, bar and sea views. It is on the market for R11.999 million - click here to view.

“This can last for an extended time until eventually they realise that to finalise a transaction in any given market, the intersection of demand and supply is where the actual sale happens.”

The market eventually disciplines all sellers and regardless of what a seller wants from a property, how much they have spent on a property, what they bought it for or the length of time they have held the property for, the prevailing market demand will dictate the price, says Wassenaar.

“Prices are at first 'sticky' downwards, but eventually adjust to meet demand. This is good news for estate agents who rely on transaction volume to earn commissions.”

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