KZN's Upper Highway market active

Despite June being the month in which the new National Credit Act was implemented and the interest rate went up half a notch, KwaZulu-Natal's Upper Highway market has started to regain some of its former zing.

That's the word from Dirk van Zuilekom, chairman of Network Listings, which is represented throughout the major Durban metropolitan area.

The Upper Highway market had been comparatively depressed for some time, he said, with sales volumes dropping from around 120 units per month during 2006 to a current average of between 70 and 90 a month. This he attributed to buyer concern around rate hikes and the new credit legislation. The slowdown was further exacerbated by steadily-reducing affordability levels, particularly pertinent to first-time buyers.

However, he noted, movement in the lower and middle sectors of the market was accelerating again, with most activity taking place from around R1,2 million to R3 million. Stock priced at as much as R4 million was also generating renewed interest, although this end of the market was fraught with over-priced properties that were likely to sit unsold for months before either selling for reduced amounts or being withdrawn by the owners.

Van Zuilekom said current activity was hardly influenced by the "packing for Perth" scenario, once a major driving factor in the market. Rather, he said, activity was coming from both a renewed sense of confidence among buyers and the traditional tendency for existing home owners to upgrade to bigger properties and better areas.

The residential market was also feeling the benefits of the strong commercial growth in both Hillcrest, and to a lesser degree, Kloof, he noted further. Where Hillcrest was once the country cousin of Kloof, the areas had traded status since the arrival of the country's major retail brands in the former suburb. Describing Hillcrest as the commercial and building heartland of the Upper Highway, Van Zuilekom said it was now imbued with a "big town feel". Despite the local road infrastructure battling to cope with steadily increasing traffic volumes and bottlenecks, commercial growth was strong and take-up of office and retail space high. This had ensured returns on investment of up to 30 percent in the last two years and the situation would in all likelihood continue to please, he said. He added that anyone who hadn't seen Hillcrest in the past 12 months wouldn't recognize it and that it bore little resemblance to the small rural village it once was.

Kloof, on the other hand, had managed to retain its rustic appeal despite the recent spate of office block construction in some of its once-residential areas. "The saving grace for the Upper Highway has been the limitation placed on building heights by the local authority. While they regularly grant special consent for property to be used for commercial purposes, they will not allow buildings to exceed two storeys in height. This, and the fact that most of these new buildings are being tastefully designed to blend in with the surrounds, have ensured that the areas don't turn into eyesores."

Waterfall was also showing good if constrained residential growth, he said, with the entry level price of a standard house or townhouse now just a little short of R1 million. Traditionally a haven for entry level and family buyers, the maturing of its prime suburbs along with its proximity to Hillcrest had driven prices out of the reach of those on tight budgets, he said. They were therefore being forced to move to places like Crestholme where building sites cost around R350 000, townhouses in the region of R800 000 and standard three bedroom homes about R900 000. – Ingrid Smit

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