Anyone reading the latest Deeds Office statistics for the Umhlanga Rocks precinct on the North Coast of KwaZulu-Natal might get the impression that this is one of the most affluent areas in South Africa – and this is, in fact, the case. The average monthly household income here is listed as R75,000 and this year the average price achieved for sectional title units has been around R2,4 million, while that of homes has been at R4,3 million.
If, however, all the suburbs associated with or in the Umhlanga area are taken into account, i.e. Mount Edgecombe, Umhlanga Ridge Town Centre, Prestondale, Glen Anil, La Lucia, Sunningdale, Somerset Park and Umdloti, it becomes clear that, although the precinct definitely retains its upmarket status, there is a wide diversity of prices – and it is still definitely possible to buy a home priced below R2 million or even below R1,5 million.
Rob Raven, the Rawson Property Group’s co-franchisee for Umhlanga, said that in areas such as Umhlanga Ridge Town Centre, his franchise can still find buyers a single bedroom apartment priced below R800,000 and, although stock shortages are now becoming a problem, there is a steady turnover in homes priced from R1,5 million to R2,5 million. In this price bracket, he said, demand exceeds supply.
As elsewhere in South Africa, said Raven, the market realities (i.e. that prices have sunk to roughly 2005/2006 levels) are not accepted by many sellers, especially those who bought in the boom era of 2007 to 2009. This, in turn, he said, means that his team either cannot accept certain mandates or, if they do, find themselves sitting with unrealistically priced stock.
The good news, however, said Raven, is that prices have now stabilized and look set to start rising by 5 to 7% before the end of this year.
In the rental market throughout the Umhlanga precinct, said Raven, demand is very strong indeed. It is fuelled by the coastal units’ ability to attract short term holiday rentals (at high prices) and, more pertinently, by the fact evident to anyone visiting the area that Durban’s business hub has moved north into the very modern and attractive, well landscaped office nodes of Umhlanga Ridge.
This major change in the business focus, said Raven, has boosted a demand for residential accommodation throughout the Umhlanga precinct in a price range varying from R5,500 per month (for a single bedroom sectional title unit) to R35,000 for a luxury apartment in prestigious blocks like “The Pearls”.
For the average freestanding home, rentals in the Umhlanga precinct are now between R10,000 and R15,000 per month and, said Raven, they will rise steadily in the coming 12 months. If a home is offered at a rental below R10,000 per month, it will usually find a tenant within a matter of days. His rental team now expects, before the end of this year, to be signing up ten new leases each month.
His franchise’s list of buy-to-let clients, said Raven, is now growing steadily and those who buy at the lower end of the scale, i.e. at around R1 million, can, he said, be assured of steady income growth from here onwards.
“In every respect,” he said, “the Umhlanga precinct has turned the corner and prices are now definitely on a recovery path. The Deeds Office figures, in fact, indicate that the total sales this year, if they continue at the current monthly rate, will be some 15% up on those of last year.”