Property Newsletter | November 2021

Sectional Title, Estate properties find favour on KZN North Coast

Property investors on the KZN North Coast are increasingly opting for Sectional Title or Estate living.

Both categories have grown exponentially since 1994, while the growth of Freehold properties has slowed as homeowners increasingly favor the benefits offered by community living.

Of the total property stock on the North Coast, Sectional Title accounts for 56% (15 722), followed by Estate properties at 24% (6 897) and then Freehold at 20% (5 814 properties).

In 1994, there were just 219 Estate houses on the North Coast, but this has grown to 6 897 – an increase of 6 678.

Sectional Title units have risen from 4138 in 1994 to 15 722 now, an increase of 279%. Conversely, the growth of Freehold properties has slowed. There were 3 576 in 1994, and this has increased by 2 238 to 5 814.

How the market has grown: 1994 -2021

Most residential development since 1994 has taken place in Umhlanga Ridge New Town Centre – and it has all been Sectional Title. Next is Mount Edgecome, where Estate properties dominated, followed by Sectional Title with relatively few Freehold properties. In third place was Umhlanga Rocks, again dominated by Sectional Title and followed by Freehold, with Zimbali fourth, mostly with Estate properties and a small amount of Sectional Title.

Development post 1994

Most buyers, nearly 88%, are repeat buyers, and just 12% are first-time buyers.

	Repeat buyers	First time buyers	Grand total
2015	2 384	399	2 783
2016	2 474	315	2 789
2017	2 254	287	2 541
2018	2 532	337	2 869
2019	3 087	383	3 470
2020	2 028	362	2390
2021	2 028	362	2 390
	17 334	2 444	19 778

The pricing of the properties may explain the fairly low number of first-time buyers, as properties selling at less than R1m account for just 3% of what is available, those between R1m to R1.5m account for 12% while properties priced from R1.5m to R3m, and R3m+, make up 83% of the KZN North Coast market.

Of the 11 671 private buyers since 2015, 3 093 (27%) were under 35, 4 251 (36%) were between 36 and 49 years old, 3 150 (27%) were between 50 and 64 years of age and 1 177 (10%) older than 65.

It is important to invest in a market where there is constant supply and demand for properties, and the KZN North Coast market is buoyant with transfers accounting for around 10% of total stock in any one year.

Typically, more than 2 500 properties change hands every year, although activity did slow with Covid-19 in 2021 and just under 2 400 transfers were registered. The graph below shows the reasonable consistency of the market in terms of transfers each year since 2015.