Seeff Dolphin Coast Principal Andreas Wassenaar recently analysed the 451 property transactions concluded in Zimbali Coastal Resort between 1 January 2014 to 30 June 2017. This 3.5-year period yielded sales in excess of R2.4bn in Zimbali, and revealed some interesting aspects of the Zimbali property market, which Wassenaar describes below
For these R2.4 billion in sales in Zimbali, only R885.4 million in mortgage finance or 36.33% of the total was used to finance these property transactions. This means that R1 551 971 095 in cash – close to R1.6 billion, was used to pay for these sales. That is a lot of cash flooding into Zimbali. No other estate in South Africa has attracted this level of investment over the past 3 years.
“Considering only freehold home transactions over this period, we see that R833.6 million traded hands, represented by 90 transactions. This category of sales represented 34.2% of the total sales, and the average price was R9 262 132. Given that Zimbali Coastal Resort is at the end of its development cycle, only R87 million in development site opportunities were recorded. Developers tend to pay for sites in cash, and the figures reinforced this, with only R10.4 million in mortgage finance raised to help finance these sales“.
The single residential vacant land sales over this period amounted to R343.1 million, with only 29.4% or R100.9 million in mortgage finance being used to pay for these sales. Over two-thirds of people who bought vacant land in Zimbali over this period therefore used cash. The average price across these 98 land sales was recorded as R3 501 052. The highest price recorded for a single residential site was R12 million.
“The sectional title market in Zimbali is an interesting one, as you have two distinct sectional markets: the typical apartment or townhouse within a cluster development within the estate, and the hotel suite type of property. Over the past 3 years R955 million in traditional sectional title homes have traded, representing 39.18% of the total sales. It is interesting to note that people use more mortgage finance to pay for sectional title investments, with the figures showing R400.5 million in mortgage finance used to help finance these purchases“.
The average price across the 183 traditional sectional transactions was R5 218 311. A very useful statistic that emerges from these sales is that across the 61 399 sqm of sectional space traded, the average price per sqm is R15 553. This is very useful to know and to use as a value benchmark when considering purchasing a sectional title property.
“The Fairmont Hotel sectional title sales for the period 2014 to mid-2017 amounted to R218.7 million or 9% of all sales. What is fascinating is the rate per square metre achieved on these transactions. Across the 5474 sqm traded, the average rate achieved was R39 952. The highest average rate was achieved during 2015, at R42 009/sqm. This is impressive and starts to compete with rates achieved in places like Cape Town.“