Aerial view of Umhlanga village with an artist’s impression of Beacon Rock in the centre.
Major developers, traditionally recognised as having an astute capacity to read the market, are becoming increasingly active, reports Elwyn Schenk, Pam Golding Properties (PGP) area principal in Umhlanga and Umdloti.
PGP is marketing two new residential developments in sought after locations in Umhlanga.
Says Schenk: “Conventional wisdom suggests that the start of a property market recovery is characterised by some or all of the following factors: low values, a decline in foreclosures, some easing in credit availability, low turnovers and a shortage of stock, and a pent-up demographic demand.
“In my view residential property – especially in the Western Cape, North Durban/Umhlanga and Johannesburg – display all these characteristics. In La Lucia, Umhlanga and Umdloti particularly, property prices are in most cases well below their new equivalents. Banks are finding value more readily and credit is gradually easing.”
Schenk says researchers in the United States describe a number of overlapping cycles in the property market, with shorter cycles of three to five years, and longer cycles of nine to 10 years. In South Africa the market softened during 2008/9, but more recently has displayed the green shoots of renewed growth.
Over the longer term, changes in demographics and consumer buying power are major drivers of the property market. It is a combination of these factors which is fuelling the demand for property in areas such as Umhlanga and Umdloti, especially following several years of muted developer activity and rapid growth in the Ridgeside/Gateway area of Umhlanga.
In Ridgeside on Umhlanga Ridge, more than 220 000 m2 bulk commercial property has already been transferred, with large corporates such as Investec, accounting firm BDO and Vodacom recently joining many others on the Ridge. This area is set to capitalise on KwaZulu-Natal’s growing economy and expanding trade connections, which are opening up a number of attractive investment opportunities.
In Umhlanga Village, Pam Golding Properties is marketing the mixed-use Beacon Rock development, which is already under construction close to Umhlanga’s main beaches. This project incorporates 68 apartments, a retail component at ground level and four floors of office space.
The apartments in Beacon Rock are a mix of one, two and three bedroom units, and residents have access to a protected landscaped courtyard and pool area. Prices start at R1.3 million for a 58m2 one bedroom apartment, with two bedroom units of 122m2 priced from R2.3m, 128m2 three-bedroom units from around R2.4m, and 240m2 four-bedroom penthouses of and 360m2 priced between R7m and R10.5m. Schenk says several units were reserved before the launch last month.
In the most desirable part of the thriving Gateway node, next to Chris Saunders Park, PGP is marketing The Elements, a luxurious apartment building with 68 units, which Schenk says will employ ‘green’ technology to minimise its carbon footprint.
“There are one, two and three bedroom apartments from 50m2 to 108m2 in size and priced from under R1m, as well as two penthouses priced at R3m and R4m. The Elements will be launched early this year. The ground floor of the four storey building will have garden flats and 500m2 of light retail/offices.”
He says it’s no coincidence that two respected developers – one part of a large Gauteng group – have chosen Umhlanga as an investment destination. Umdloti too is no longer living under the shadow of its supposedly more illustrious neighbour.
“The opening of the King Shaka International Airport and the busy Dube Tradeport have revitalised the area, leading to a strong increase in demand. PGP recently sold a flat in the 30 Degrees apartment block for R9.5m, a record for Umdloti, overtaking the previous highest price of R4.6m for an apartment. On the drawing board by the Liviero Group, the same developer as 30 Degrees, and set to be launched in early 2012 is a block of six luxury apartments in a quiet area of North Beach Road.
“With world markets still unsettled and the threat of a ‘double dip’ in Europe, equity markets remain nervous and even the gold price seems to lack direction. There are however pockets of renewed growth in property – for many the only trusted hard asset – where oversold positions and demographic shifts have fuelled demand. These areas include the east coast of the United States and London and the south-east part of the UK. I believe the same dynamic, coupled with additional local features, is set to drive the Umhlanga and Umdloti property markets for the next decade and beyond,” he says.
Call Elwyn Schenk on 031 5615300 or email umhlangarocks@pamgolding.co.za.
