Real Estate Investor Magazine South Africa June 2018 | Page 32

SPOTLIGHT
Navigating the
Durban Market
Top investment locations
R
ecently voted the South African city with the highest
quality of living in mercer’s annual ranking, Durban
is making its name as a property hotspot. Lightstone’s
data shows month after month that coastal cities show better
growth than those inland, 8.3% compared to 5.4% in the last
quarter. According to Private Property data for April, the me-
dian price for a property in Durban was up 7% from a year ago.
The website also notes that buyers were showing interest in
suburbs across the city. Reasons for a suburb’s popularity range
from security, proximity to business hubs, schools in the area,
and the selection of properties available.
According to the website’s data, the most popular suburb
for April was Malvern. Median asking price for a typical
property (3-bedroom house) in this suburb is R1.35m, with
affordability and ease of access being the two main factors for
its demand. The second spot is taken by Durban North, with
the median price for a typical property (a 4-bedroom house)
sitting at R4.75m. The area is known for its good schools, good
location and choice of property. The third place goes to New
Germany. Located close to industrial areas, good schools, and
the commercial centre of Pinetown, the suburb is popular
amongst first time buyers looking for a good price. The median
price for the typical property (3-bedroom house) is R1.065m
Seeff KZN reported a 9% growth in sales in 2017 when
compared to 2016, primarily attributed to the availability of
stock provided by developments in the areas of Ballito, Um-
hlanga, Queensburgh and Hillcrest. Carol Reynolds, Pam
Golding Properties’ area principal for Durban Coastal high-
lights that Durban is primed for a run similar to Cape Town’s:
“It’s interesting to note that the price inflation that Cape
Town has experienced over the past four years has to a large
extent been driven by Johannesburg semigration, rather than
by international investors. Given that our local investors have
the capacity to drive demand to such an extent, we anticipate
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JUNE/JULY 2018 SA Real Estate Investor Magazine
a similar influx of families to the North Durban coastline in
the coming years. Most notably, Johannesburg commuters are
seeking the lifestyle offering in KZN, which, in my opinion,
simply cannot be beaten.”
She notes that they expect a buoyant year in the North
Coast corridor, stretching from Durban North through to
Ballito. She is also hopeful that developers will introduce more
entry-level stock: “We have been in discussions with several
developers who are researching the viability of sectional title
complexes with smaller, trendier units at lower ticket prices to
cater for the young professional market. This will drive activity
levels and be an enabler for those who have found traditional
market prices unattainable.”
Rawson Property Group’s Berea franchise partner, Ma-
homed Jooma, also points to Durban Central as an oppor-
tunity for investors: “Durban Central went through a bit
of a rough period a while ago, but there’s a huge amount of
redevelopment going on these days,” says Jooma. “The Point
Waterfront has just begun a massive facelift with a R35 bil-
lion mixed-use development under way, and the ‘Golden Mile’
beachfront is in great condition after improvements before the
2010 World Cup.”
Properties here are almost exclusively sectional title, with
many bargains to be found in an area known for its buy-to-
let opportunities. Jooma points to the Esplanade and CBD
in particular as thriving rental markets. Moving into the more
suburban area of The Berea, investors are seeing an 8-10%
ROI, with rising interest in buy-to-let properties. In particular,
returns on commercial rentals in the area are rising, offering
another exciting opportunity.
With its close proximity to Johannesburg, coastal lifestyle,
and variety of options, Durban seems to have something for
everyone - if they know where to look.