Many of the trends in the South African residential property market which have been the subject of much discussion in the property media recently are clearly evident in the huge Westville and Pinetown districts of Durban, says Terry Elson, the Rawson Property Group’s franchisee for these areas.
Particularly noticeable, says Elson, is the steady influx of previously disadvantaged South Africans who now aspire to middle class status and home ownership at Westville and the steadily growing numbers in Pinetown who are buying and upgrading at a faster rate than ever before.
Westville and Pinetown together, says Elson, have some 40,000 homes in a 10 km precinct stretching from Berea to Kloof and by his estimate some 5% of these change ownership every year.
As yet, says Elson, the demand for homes, although highly satisfactory, does not, as in many big South African city suburbs, exceed supply and price rises, although now becoming noticeable, have since 2011 (when the recession-induced downward trend eased off) been only marginal.
These factors, he says, mean that in Pinetown today homes are selling from roughly R100,000 to R1,200,000, while in Westville the price range is from R800,000 to R10 million, (he, in fact, has one home on his stock list priced at R11 million), with the big demand still being for homes priced close to R1,5 million.
In the more expensive homes, of which Westville as one of the older and better established of Durban’s suburbs has its fair share, demand is slowly beginning to catch up, with prices which a year or two ago were unacceptable to virtually all buyers. Elson, in fact, predicts that within the next two years houses in R3 million to R5 million bracket will be selling at a rate, although not equal to that of the lower price units, that will be satisfactory.
Another trend which is month-by-month more evident in these areas, says Elson, is the swing to rental property. This, in turn, he says, is leading to an upsurge in buy-to-let investors.
“In a great many ways,” says Elson, “renting does provide the perfect solution for the family who are not prepared to compromise on their living standards but cannot as yet afford to buy a typical middle class home in Westville. This is because it is possible for R10,000 to rent a home that with bond, maintenance, rates, taxes and other costs would cost the new buyer R20,000 per month. The rental price range in the Westville area is from R8,000 to R30,000 per month, with the big demand being for freestanding homes renting at ± R10,000 per month.”
So strongly is demand for rental property growing, says Elson, that he foresees 65% to 70% of his business in five years’ time being rents rather than sales.
This Rawson Property Group franchise now employs 24 agents and they expect to double their market share year-on-year. They also expect to be managing up to 200 rental units and signing on 15 to 20 new tenants per month.
For further information contact Terry Elson on 082 410 1336 or at terry.elson@rawson.co.za.
