KZN house prices are up and new developments are down

Consumers have reverted back to investing in residential houses as opposed to sectional title accommodation such as flats, with homes in the suburbs appearing to represent a better value for money option for Pietermaritzburg residents.

That is the view of Arnold Nel, Chairman of the Institute of Estate Agents (IEASA - Pietermaritzburg), who has revealed that average house sales price in Pietermaritzburg during 2006 was about R810000 - 37% up from 2005.

By comparison, the average price of a sectional title in 2006 stood at about R520000 - a modest 15% higher than the figure for 2005. The growth recorded in the average selling price a sectional title in 2005 was more than 40%.

Interestingly though, while price growth remained high, the number of house sales recorded dropped by almost 20% last year.

Nel told The Witness that Westgate, Grange, Ridge Park, Northdale, Panorama Gardens and Woodlands remain areas which are very active, due mainly to affordable prices in these locations. Flats located in central areas also remain popular, according to Nel.
With respect to sectional titles, he said that consumers were not willing to pay exorbitant sums of money for flats.

"Developments are slow in being bought...The public realise that it is perhaps more prudent to buy other property instead."

Land in and around the city remains at a premium, characterised by strong demand and limited supply. The IEASA'a residential property price indicator for the Pietermaritzburg area also showed that the average selling price of land was almost R400000 - an increase of about 43%.

"Beacon Hill and the Victoria Country Club Estate are still doing very well. In terms of land, there has been a bit of a slowdown but it is still healthy. The lack of supply has pushed prices up."

He said that Ashburton and the corridor leading up to Cato Ridge is likely to become a critical area of focus for buyers and sellers alike. Nel added that the Pietermaritzburg housing market is likely to achieve double figure price growth by the end of 2007, even in the face of rising interest rates. While the estimate, of between 12 and 15%, is well below the price growth experienced over the past few years, it appears that the local market will remain quite active over the next 12 months.

He noted that there is still a healthy demand for office space, with government playing a major role in this regard.
On the professional front, Nel noted that there will be major changes on the cards with respect to the education of estate agents. He said the changes related to the minimum requirements needed to register as an estate agent. In addition, he said the minimum requirements for the education of prospective estate agents are also expected to be changed. Existing estate agents may also be required to undergo ongoing training. – Kavith Harrilall

Article courtesy of The Witness.

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