September 28th, 2012

Richards Bay ripe for developers and investors

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One of a handful of towns in South Africa where demand for residential property currently exceeds supply, Richards Bay on the KwaZulu-Natal north coast is ripe for developers and investors.

That’s according to Anil Kalidas, divisional manager of Harcourts Richard Bay, who says the coastal town is experiencing unprecedented demand for certain property classes on the back of its thriving industrial and shipping sectors.

“Buyers and tenants far outnumber properties in the entry and middle markets,” he says, adding that the average selling time for properly priced homes in popular areas is around eight weeks – less than half the national average as reported by FNB in its second quarter Property Estate Agent Survey. “Rental stock is also in short supply, and while construction is underway in Veldenvlei on a retirement and frail care facility, which will hopefully be ready within the next six months, there is nevertheless huge scope for additional such development.”

Buying activity is particularly pronounced among first time buyers as well as existing home owners moving up to bigger houses in better areas, he continues. There is also strong demand for rental accommodation, not only by private individuals but also companies for contract employees whose leases range from one to three years. Accordingly, investors wanting to capitalize on the need for rental accommodation in the area are showing strong buying interest in a new, 72 unit sectional title complex called 979 on Pearls in Arboretum. Priced from R499 000, the units cater for those wanting affordability and security as well as easy access to their workplaces in the case of those employed in nearby Alton, says Kalidas.

Meerensee, Richard’s Bay’s oldest residential suburb, is also enjoying good sales activity, he continues. The beach-side suburb is attracting a constant stream of buyers upgrading from other areas, mostly in the R1,2m to R2,7m price range, but with some interest in its most exclusive homes, which carry price tags of up to R5m. Similar buying patterns are occurring in Birdswood, which also has a wide selection of properties in all price ranges. These include two bedroom townhouses from the mid R500 000s to well over R3m for luxury homes in the best roads. The local golf estate, which he describes as “upmarket, safe and tranquil” is also selling well, he adds.

Home buying activity is also up in the village of KwaMbonambi, which lies 23 km inland of Richards Bay. Prices here range from just under R400 000 for an apartment to R1,3m for a average three bedroom house, although stock at any given time is usually limited to less than 10 properties, says Kalidas. He’s expecting buying activity to strengthen once the new flyover on the N2 at the KwaMbonambi intersection is completed, which will make access in and out of the village much safer.

People are also buying in Mtunzini, which, while half an hour’s drive from the centre of Richards Bay, compensates with its attractive beach-side lifestyle and idyllic natural setting, says Kalidas. Among the 180 properties for sale in Mtunzini at the moment are a number of vacant stands priced from R400 000 to R1m, two bedroom flats upwards of R700 000, simplexes and duplexes from R900 000, freestanding houses from around R1m and, for the well-heeled, luxury homes up to R6m.

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