The future of property in KwaZulu-Natal is looking bright as a number of major projects in the province are given the green light.
Brendan Falkson, MD of Hulett Development, says the property market in KwaZulu- Natal has tended to lag behind the overall South African property market, and while there has been some catch-up taking place there remains room for values to appreciate further.

"There is strong political will in the province to drive major projects that will have a significant effect on the economy.

"For example, the new King Chaka International Airport, being built at La Mercy, is due to be completed in 2009, and there are upgrades planned for the ports of Durban and Richards Bay."

Other major projects include Riverhorse Valley Business Park and expansions by Mondi and Toyota, Falkson says.

He says the market is very active and there has been an unexpected increase in the number of people keen to live in coastal estates rather than simply buying as investments.

Umhlanga is an area that is undergoing rapid development, he says.

"Most of the take-up is in properties that are within a 20 to 30-minute drive of Umhlanga Ridge, such as Ballito," Falkson says.

He says property prices have moved significantly over the past two years, mainly because the supply of land in KwaZulu-Natal is constrained.

Large tracts of land are in corporate hands and is released to the market gradually.

"Land prices in upmarket coastal estates have breached R1m, and some land is going for up to R2,5m for stands in the 1,000mm² to 1,500m² range.

"At the top end of the market, houses are fetching up to R15m in the high-demand gated estate addresses.

"However, there are entry-level investments. People can still get into a gated estate for R500,000 to R600,000 for a 1,000m² plot," Falkson says.

Prices in KwaZulu-Natal compare favourably with Johannesburg and the Cape, and offer good opportunities for investors.

He says participating in the Investment Opportunities Show places property developers in a different market, as they are addressing people who are seeking investments.

"People are looking for investments rather than simply seeking to purchase a second home. This is where KwaZulu-Natal has a huge advantage over other areas of the country.

"There is a significant amount of commercial growth in the area," Falkson says.

He says the King Shaka Airport is situated on land the size of London's Heathrow.

The airport is expected to function as a distribution hub to the rest of Africa.

"Consultants will be brought from all over the world to assist in designing the airport and operating the distribution hub.

"Government has incentives in place to get logistics and shipping companies to relocate to Durban.

"All these people are going to be looking for either temporary accommodation or long-term residences.

"This means investors will be able to attract good rentals for their investment properties," Falkson says.

Other professionals, such as auditors, are being sent to Durban from centres such as Johannesburg on short-term contracts, he says.

Moreover, once the airport is completed, Falkson says, there may be an increase in the number of people living at the coast and commuting to Johannesburg.

He says these factors are likely to drive up property prices for gated estates situated in the more sought-after areas.

Business Day

Article by: www.eprop.co.za