King Shaka offers property boon

Johannesburg – The much-criticised new King Shaka airport at La Mercy in KwaZulu-Natal is expected to justify some of its cost to taxpayers by boosting property demand in the area.

The R8bn international airport will drive demand for upmarket property on the North Coast, said Adrian Goslett, regional director and CEO of RE/MAX Southern Africa.

According to Goslett, exclusive real estate like the Zimbali coastal resort  - where houses are priced between R7m and R42m - will see a huge surge in interest as the airport is a 10-minute drive away.

Transport deputy director-general Lanfranc Situma said on Tuesday that it had been a massive oversight to build the airport without factoring in the need for public transport.

However, Pam Golding's Elwyn Schenk said this will not affect the anticipated increase in property demand.

"We're expecting a profound impact on all the suburbs in the area," he said.

Clive Greene, a principal for Pam Golding, said there will be a drastic rise in demand for property, to be followed by a price hike within the next two to three years.

"We've had a lot of enquiries," he said. "There won't be big price increases over the next 10 months; there's still stock available, but it will pick up when the stock starts running out."

First National Bank’s (FNB's) home loans department said in April that the luxury segment is the most solid long-term investment. Although Kwazulu-Natal's North Coast saw a 0.1% drop in nominal house prices (according to Absa's first-quarter Housing Review), FNB said luxury property remains the least oversupplied segment.

According to Greene, many businesses and business people are moving to Durban from Johannesburg. "A whole secondary industry is moving out here, and the people who work there need to be housed."

Schenk said Airports Company of SA (Acsa) personnel are migrating from the south to the north to be closer to the new airport, which will boost rental demand.

"Worldwide only about five international airports have been built since the Second World War," said Greene. "There will be massive growth in the area."

King Shaka's runway spans 3.7km and has been built to carry 7 million passengers initially. Additional extensions will eventually ramp up capacity to 45 million, Acsa said.