2019 saw a dip in the property market, with concerns such as ongoing load shedding, slow economic growth and foreign investments taking a toll. However, as we enter the new year, industry professionals remain positive about the local property market’s current position to correct itself in 2020.
KZN Property Market Statistics
According to a recent presentation by Lightstone Property, the KwaZulu-Natal property market (as of end 2019) indicated the following growth points.
Top 10 suburbs with their residential values as of the end of 2019
- Umhlanga Rocks – 19.04bn
- Mount Edgecombe – 12.8bn
- Kloof – 9.21bn
- La Lucia – 8.89bn
- Durban North – 8.47bn
- Essenwood – 7.67bn
- Morningside – 6.89bn
- Amanzimtoti – 6.75bn
- Musgrave – 6.62bn
- Waterfall – 6.22bn
Some of the Most Expensive and High Growth Estates in KZN
- R 9.7m Izinga Park, Umhlanga
- R 7,5m Zimbali Coastal Resort, Ballito
- R 6.7m Seven Acres Estate, Kloof
According To Property24, here are the average sales price of various suburbs as of end 2019:
- Amanzimtoti – R1.45m
- Ballito- R3.1m
- Umhlanga Rocks – R3.9m
- Morningside – R2.45m
- Kloof – R1.95m
Having analysed the current market conditions, we have compiled a few potential property trends to look out for this year.
Lifestyle vs Financial Gain Investment
The current KZN market seems to be split into two distinct buying trends, investing for lifestyle or investing for capital gains.
With the rise of gated communities in the province, particularly in areas north of Durban, more homebuyers are investing in the secure lifestyle opportunities opposed to buying a home to sell for profit – later down the line.
In the suburbs along the North Coast, such as Ballito, the average sale price of properties increased by approximately 6% between 2017 and 2019, while suburbs like Durban Central saw an increase of nearly 23% for the same period (according to Property 24).
These statistics support the two investment trends.
While not growing as rapidly as in previous years, Ballito is still drawing many buyers looking to invest in the lifestyle benefits of the area. At the same time, Durban Central is experiencing a demand for sectional title properties from investors seeking a return on their investment.
2020 is expected to continue seeing a younger demographic of homebuyer enter the property market. With a rise in sectional title properties close to employment hubs, those eager to get onto the property ladder now have more affordable options to choose from.
Percentage of Recent Buyers Age 18-35
- Durban – 33.6%
- Westville – 25.1%
- Amanzimtoti – 34.5%
- Ballito – 18.5%
Another critical factor in this trend is the banks’ willingness to lend money. With the Repo Rate being lowered in mid-2019, this lower interest rate environment provides first-time (younger) buyers with the opportunity to secure the finance they need to get a foothold on the property ladder.
Tourism and Investment
Durban has remained one of South Africa’s most visited destination, with many domestic and international tourists arriving on its shores every year.
Notably, the introduction of direct flights between Durban and London (via British Airways) has produced an increase of international passengers flying into King Shaka International Airport by 11% -positioning it as one of SA’s fastest-growing international airports.
If this influx continues to build, the local economy is set to strengthen, creating more jobs and business activity – thus positively impacting the 2020 property market.