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You probably haven’t heard of Kwelera (don’t worry neither had we) but the small suburb in the Eastern Cape is quite the investor magnet.
It’s abundant coastal forest vegetation and national botanical garden are fast becoming a tourist destination and is one of the reasons why South African multimillionaire Sisa Ngebulana and his Billion Property Group recently announced plans to build a mixed-use affordable housing complex of over 5,500 flats and 1,400 town houses there.
A dicey move or shrewd investment? We ask some experts for their view.
Meeting demand head on
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Many people have re-evaluated their lifestyle post pandemic, especially now that working from home has become the new normal. Buyers are motivated by a desire for more space more than ever, which is understandable considering the practical implications of lockdown and self-isolation.
According to Kerry Bailey from Tyson Properties in Umhlanga and Ballito, there seems to be even less need and demand for buyers to be close to busy and overcrowded metropolitan areas where homes tend to be smaller and roads and public areas more congested.
‘The pursuit of a more fulfilling and peaceful lifestyle has been the driving force for many families, who are now looking to relocate to smaller towns so that they can enjoy more space, outdoor activities and spend less sitting in traffic. It is all about a less stressful and more balanced lifestyle,’ she says.
It makes financial sense too, as homes further away from big cities are much cheaper, meaning families especially can get a much larger plot for much less. While the demand is up though, Kerry tells us that developers are struggling to keep up, with not enough freehold homes on the market
‘Although Ballito has mushroomed over the years there are still some more outlying coastal areas like Salt Rock, Chakas Rock and Sheffield Beach in Kwa Zulu Natal that have plenty of interest but not enough available stock,’ she says.
Getting the balance right
The hardest task for developers is getting the balance right says Yael Geffen, CEO of Lew Geffen Sotheby’s International Realty.
‘Most buyers moving to coastal towns come from upcountry and while they are very keen to trade in their fast-paced city life for a healthier and more balanced one they still have their list of prerequisites,’ he says.
For families, being close to good schools is a no brainer, while hospitals and medical facilities are a huge plus for retirees and empty nesters. Being out in the sticks is great, but buyers also want the ability to get around if the need arises and so proximity to an airport is key too.
Lalea, a Collins group development in Sheffield Beach is a prime example of affordable living in a seaside town that works. Being close to King Shaka airport is a huge plus here as it allows homeowners to commute to Johannesburg and return on weekends and holidays to enjoy easy access to the coast.
Costs and logistics
As always, everything boils down to money and the costs and logistics of building in an outlying area can be quite nightmarish. Previously undeveloped land in remote areas of South Africa tend to lack solid infrastructure. Getting municipalities to supply that infrastructure so that electricity, water, and sewerage services can be provided can be costly, stressful and time intensive.
As Andrea Tucker, director of MortgageMe explains, there is a big list of additional things developers need to consider when building in isolated areas.
‘We always advise those wanting to build and live near the coast for example to prepare to spend more on home maintenance for their property than they would elsewhere as salt water is so harsh on property,’ he explains.
For a developer, this means building homes using materials that can withstand salt water and wind wear and tear. These materials are often pricier, but of course, they can pass on this cost to buyers. Developers and homeowners might also need to shop around for insurance, when it comes to covering the risk of the building being prone to the effects of inclement weather.
