Residential property in most of the less affluent sections of South Africa’s major cities has in the last few years witnessed a massive increase in demand – and nowhere is this truer than in Durban.
Ravi Maharaj, who manages the residential sales of the Rawson Property Group’s Durban Central franchise (owned by Bradley Bougardt), said that there is now always a shortage of stock and any correctly priced unit is likely to sell within seven to 14 days. Turnover in his franchise, he said, has increased by over 100% in one year.
The demand, said Maharaj, from North Beach to the Point Waterfront is driven by the fact that, for many people living here, it is possible to walk or to take a short bus ride to their workplaces and the area also provides a hive of entertainment facilities with many restaurants, uShaka Marine World, the Moses Mabhida stadium and Suncoast Casino, but demand is also being boosted month by month by a massive influx of African, Indian, Pakistani and Chinese entrepreneurs who have set up businesses in this district – and tend to do very well.
“For many people,” said Maharaj, “this part of Durban offers huge business opportunities.”
Most of the enquiries for residential property and the fastest sales, said Maharaj, are for sectional title units in the R400,000 to R650,000 price category – and the buyers, he said, are as often as not investors who have awoken to the realization that prices and rentals here are rising at ± 10% per annum and are likely to continue to do so. Typically two or three bedroom sectional title units in this part of the city are able to command rentals of R4,500 to R7,000 and R12,000 to R15,000 per month.
This franchise, added Maharaj, is in the strong position of being linked to a Rawson Rentals franchise owned by Bradley Bougardt and is therefore able to provide investors with a one-stop service. Already the rental franchise has hundreds of properties under its management and it continues to expand each month.
The big challenge facing any estate agency operating in Durban Central, said Maharaj, is to increase the ‘hit rate’ of its bond applicants. In addition to the usual reason for bond rejections (an impaired credit record) in this part of the country, there is often another reason for turning down a bond – the bank being dissatisfied with the condition and therefore the price asked for the building. As yet relatively few buildings, he said, are undergoing major refurbishments that could send their prices up faster.
Asked if he foresees these near-boom conditions continuing, Maharaj said that he can discern no reason at all why demand should slow down.