Prospects for the Ballito property market are looking up. On the whole, the area has held its own through the recession and although there have been fewer sales than pre-2008, prices have not come down as dramatically as in other KZN areas. The market has been reasonably stable for the past year and levels are expected to remain steady in 2012. Supply and demand always plays a role in pricing as well as external factors such as the bank lending criteria and the economy.
“King Shaka International Airport has undoubtedly played a role in uplifting the area. Commercial development, with easy access to the airport, continues to increase. Many businesses are relocating to Ballito and with the construction of shopping centres and a new road infrastructure, growth is positive. This means increased demand for housing as people choose to live close to work,” says Keith Brown, Jawitz Properties’ principal franchisee.
By and large, the greatest value is still in the suburbs where homeowners pay less per square metre. Demand for older homes that need renovation has increased but there is a shortage of stock. Average priced homes sell within three to six months, but higher value properties over R3.5m take much longer. Again, this has not changed from a year ago although there has been a slight increase in buyers since the beginning of August 2011. Prices vary dramatically from suburbs to gated communities.
The average price for a three bedroom family home in fair condition is R1.9m. A renovated home of equal size can go from R3m upwards. As all the homes in the gated estates are new, they tend to start at R3m and increase from there. A two bedroom sectional title unit on the beachfront will cost anything from R1.5m upwards, depending on location and age of building.
“Market related priced property attracts interest from buyers and sells within four months of listing. However, there are many properties which are still overpriced and struggle to change hands. Gated Estates such Simbithi are highly sought-after and sales of land are on the increase. The idea of designing and building their own home appeals to many buyers. Re-sales of homes in these estates are improving as more homes are built and come on the market. Once again, price plays a big role. Second home, sectional title still makes up over 60% of all sales, particularly those units along the beach front,” he says.
The lower end of the market up to R1.5m is the most active fuelled mainly by first time buyers who qualify for bank loans. The middle sector, from R1.5m to R3.5m is faced with affordability issues and other disposable income debt, making it difficult to raise a bond. Sales in the upper end of the market are slow. Deals, when they do take place, are usually generated by cash buyers or bridging finance.
Rentals are booming and long term rentals struggle to keep up with demand due to an influx of people migrating to the town. Return on investment is still low at between 5 and 6%, but with the current demand this is expected to increase over the next year.
“Typically, sellers always push for top prices and buyers are continually looking for bargains. Currently, the market is well balanced and sellers are having to face the reality that the banks’ lending criteria has not changed. They are, however, beginning to understand that if they want a sale, they have to get in line with market related prices. Property buyers, on the other hand, are far more realistic and open to negotiation,” he says.
Paula Neild is the Marketing Manager for Jawitz Properties South Africa. Contact paula@jawitz.co.za or call 011-880-3550. Jawitz Properties specialise in South African property for sale and property rentals throughout South Africa. Visit http://www.jawitz.co.za for more information.
No comments:
Post a Comment