Dina Porteous, Pam Golding Properties' area principal based in Margate on the lower south coast of KZN, says due to the fact that prices of coastal properties in the Margate and surrounding areas have lagged behind those located elsewhere in the country it has become an attractive option for people to purchase old properties and demolish them, thereby securing prime positions.
"Most of the older homes on the Margate beachfront have either been demolished or extensive refurbishments carried out. In addition, developers have seized the opportunity as this trend has gained momentum, buying up old guest lodges, hotels and older blocks of flats to replace them with more upmarket complexes and resorts," says Porteous.
"While this trend began during the last property boom in 2003, it has taken place to such a degree that people who have not visited the area for a few years now hardly recognise the coastline. However, with sellers now inflating their prices, the trend has slowed down slightly.
Nearer to Durban in the Amanzimtoti area of the south coast, PGP's area principal, Terry Cousins, says this trend is already clearly evident in the Athlone Park/Amanzimtoti areas in roads such as Wavecrest Road, Kingsway, Ocean View, Nyoni Crescent and Ipahla.
"These are prime coastal addresses with scenic views due to their elevation. Here you can still buy an older home set on an erf of around 1,500sq m for between R2,5m and R3m. Prices here are still catching up with those in the rest of the country so this still represents value for money, with tremendous investment potential.
"Such buyers are then investing a further amount of approximately R2m on building a modern, new home. This process is resulting in a positive and natural rejuvenation of these areas, which will ultimately boost property values in the vicinity. In the future we see this extending further into the Ridge Road area, where the trend is only just beginning to become evident," adds Cousins.
In Umhlanga on the north coast, Sally Schenk, PGP's area principal, says the growing trend reaffirms consumers' increasing investor confidence in the La Lucia and Umhlanga areas, coupled with the lack of available land.
"The exceptionally strong demand for prime beachfront property is resulting in the purchase of such property purely in order to demolish the existing home - and build a brand new luxury home. Following the recent sale of an Umhlanga beachfront property, which was purchased for R5,2m, the home was demolished and an additional R10m invested in a new home. Situated on a stand of 1,350sq m, the entire property is now valued at around R15m.
For more information contact 039 317 3003.
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