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Durban - KZN residential property values are feeling the corrosive effects of jumping interest rates and the nine-month-old National Credit Act, though certain areas are thriving.
This is according to data released on Thursday.
Figures for the first quarter of 2008 compared to the first quarter of 2007 for Durban's 12 selling regions collated by PropValues, which monitors KZN property values and trends, confirms the slowdown in actual sales and a marked decrease in house-price growth.
The figures, however, according to Ross Sibbald, director of
PropValues, also emphasise that year- on-year activity still remains fairly stable in the more affordable markets.
"Durban CBD/Beachfront, Durban North, Phoenix, Pinetown, Upper Highway, and Westville residential zones all recorded a year-on-year increase in average selling prices," said Sibbald.
Rising and dropping
"The most significant increase is in Westville, with a 19%
rise from R1 199 430 in the first quarter of last year to R1 424 891 in the first quarter of this year."
By comparison, average selling prices in the Berea, Bluff,
Queensburgh and Upper South Coast all slipped from those recorded in the first quarter of last year.
The largest dip of 8% was registered in Queensburgh, from an average selling price of R729 871 for last year's first quarter to R685 943 for this year's first quarter.
Umhlanga's average selling price recorded a 1% rise from R2 031 417 to R2 050 084 for the same period, but the number of units sold fell substantially.
Biggest surprise in the data highlighted by Sibbald, and also
blending in with reports of strong lifestyle- driven cash sales in the area, comes from Ballito, with the average selling price surging by 41% from R1 701 702 to R2 381 341 for the period under review.
However, sales in number of units sold and total rand values in
Ballito declined substantially.
Distorted
Of the more affordable markets, Sibbald says Phoenix recorded the highest average selling price increase with a 16% rise from the first quarter of last year to the first quarter of this year, followed by Pinetown with an 8% rise.
However, Mike Bennett, Proprop CEO, believes Pinetown's increase has been distorted to some extent by the large number of buyers lowering their purchasing ambitions from houses to more expensive flats.
One market to buck the general decline trends was in Durban North where the average selling price grew by five percent from R1 548 769 to R1 629 754.
Total number of sales in gross rand value increased while unit sales and number of days listed paralleled those recorded in the first quarter of last year.
Mildly optimistic
Sibbald is mildly optimistic of conditions improving in the third quarter, based on "some serious and ongoing realistic adjustment taking place in sellers' asking prices," and the gathering swing towards rentals driven by home loan thwarted buyers.
"Conditions are definitely moving toward favouring the buy-to-let investor, but there's still some hesitancy because of doubt that the market has actually bottomed out yet," said Sibbald.
"But, once definite signs emerge that it has, or is about to regain positive territory, we expect to see the start of a recovery."
- Sapa