Durban's Upper Highway precinct homes retain value

Posted On Tuesday, 03 February 2015 13:54 Published by
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Homes in Durban's Upper Highway precinct will retain their value - despite reduced sales.

Durban

Most of the suburbs in Durban's affluent, prestigious Upper Highway area, which has some 25,000 houses altogether (60% freehold and 40% sectional title/estate) have emerged from the downturn of 2008 to 2010 with their house prices relatively unaffected especially when compared to those of other upmarket areas in South Africa.

"Whereas Constantia (in Cape Town) and Bryanston (in Johannesburg) saw price drops at 25 to 40% at the peaks of the downturn from which, admittedly, they are now recovering spectacularly prices in the Upper Highway area only fell by 5 to 15%. What is more, they are now once again on or above the previous peak period levels and, in the lower price brackets are starting to appreciate steadily," said David Hitch, the Rawson Property Group's franchisee for Kloof and its surrounding areas.

Hitch, who has operated as a franchise principal in this area for 11 years and has worked under the Rawson banner for three years, said that all the statistical evidence points to the Upper Highway area being one of the most stable and sought after residential precincts in South Arica.

"Deeds Office figures compiled by Lightstone showed that, even though sales in the area dropped by up to 50% in some quarters at the bottom of the downturn, Kloof, Hillcrest, Waterfall, Gillets, and, to a lesser degree, Bothas Hill sustained their prices at a satisfactory level even when in the higher price brackets demand became very limited indeed."

In Kloof, said Hitch, the average price of freestanding homes sold this year has been R1,825,000, i.e. almost exactly the same price level as last year. Significantly, last year's average price was higher than that of any previous year further evidence of Kloof's stability in riding out fluctuations even when sales drop by large percentages.

In Waterfall, said Hitch, the average price of a sectional title home sold this year was R1,356,000 with full title averaging R1,192,000 again slightly higher but very much in line with all prices in the last six years. In Gillets, said Hitch, the average price of a freestanding home sold this year has been R1,638,000 and in Hillcrest, R2,097,000. Botha's Hill saw a bigger drop (around 25%) in 2009 than most other precincts, but since then its prices have been steady, averaging this year R935,000 for a sectional title unit and R524,000 for a freestanding unit (this is one of the few areas in South Africa where the sectional title units are more expensive than the freestanding units).

Hitch says that his nine residential agents now average six home sales per month and have on their stock list some 30 properties in all. Although, as indicated, the Upper Highway area is known for its grand and affluent homes (the price range here is R1,3 million to R15 million or higher), demand currently is focused on homes priced below R3 million. Above R3,5 million, he said, properties are likely to "stick" unless big price reductions are made and, as said, that has not been the trend in the Upper Highway area.

In the current tight economic conditions, Hitch affirms renting is bound to increase in popularity. "Our franchise, which employs four rental agents, also manages properties and we are achieving rents of R8,500 per month upwards on sectional title units and R12,000 per month upwards on freestanding units. We expect our portfolio here to grow by 20% this year."

Looking ahead, Hitch said that the price stability of the Upper Highway area is likely to remain intact with 5 to 8% increases in the less expensive homes. The large number of gated estates, complemented by the occasional golf and equestrian estate in the area, he said, contribute not only to its rather classy image but also to a steady firming up of prices, while the other factors which have always made the Upper Highway area popular such as its cooler, less humid climate (in relation to the coastal belt), its beautiful surroundings and its many excellent schools, both private and state owned, will continue to attract buyers to the area.

"Right now," said Hitch, "I can quite sincerely advise people to buy in this area if they can afford it because its stability and long-term ability to appreciate in value have now been proved."

Last modified on Tuesday, 03 February 2015 14:52

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