Good reasons to invest in golf estate living in KwaZulu-Natal
On the KZN south coast, San Lameer has something to offer the entire family and has direct access to two Blue Flag beaches.
Over the past 20 years golf estate living has become well engrained as a desirable property choice for many South African and foreign home buyers.
In KwaZulu-Natal, a region with an ideal year-round outdoor climate, scenic coastline and inviting Midlands countryside, golf is a popular pursuit and golf estates attract a broad range of residents, including non-golfers.
“There are two main motivating factors driving investment in property on golf courses – security and a sense of community,” says Dr Andrew Golding, chief executive of the Pam Golding Property group.
“These days it is rare to find a purchase made purely because of the golf course itself, although this could be a differentiating factor when making a final purchase decision between two or more estates. More significantly though, it is not difficult to perceive the benefits of an environment where children can play and ride their bicycles with relative freedom, where the need for high walls around individual homes is negated and in which there is a sense of open space and freedom – and simultaneously, security.
“As urban boundaries continue to spread and families look towards a less urban, traffic-free lifestyle without sacrificing the benefits of good educational facilities, so the viability of residential estates within reach of those boundaries improves.
“Some estates are in the major metropolitan areas and have similar characteristics to conventional suburbs in cities, and others cater primarily for the secondary or leisure market. The performance or price appreciation of homes in the primary metropolitan golf estates has been very much in line with the performance of the particular areas and generally the adage that golf estates will perform better than the surrounding suburb still holds true,” says Golding.
According to Lightstone Statistics, which looks at a basket of properties that have sold more than once in a given time period, freehold property in a number of popular golf estate developments in KZN have shown real resilience and a rebound in capital growth following the 2007/08 recession.
From 2010 to 2015 freehold property analysed in this way has increased by 26.2 percent in Mount Edgecombe Golf Estate, 50.3 percent in Zimbali Coastal Resort and 179.4 percent in Simbithi Eco Estate.
The well-established and fully developed Mount Edgecombe Golf Estate is popular mainly among locals from surrounding areas looking for security and a permanent high quality lifestyle, as well as a few ‘swallows’ who spend six months of the year in South Africa and the rest overseas.
Most of these are 35 to 45 years old with young families, and are further attracted by the convenient location close to all amenities.
Sally Cameron, area principal for Pam Golding Properties, says: “There are also investors seeking a sound rental income stream, where for example a home bought for R3.5 million could achieve rental income of R18 000 to R20 000 a month. This is coupled with the capital growth to get total investment return, which over the past year has been about 8 percent, with consistent demand contributing to increased year on year growth.”
At Mt Edgecombe the golf club and estate are run as two separate entities, both drawing their own income and running their own finances. About 40 percent of residents are golfers. The estate is a mix of freehold and sectional title units priced from R2.5m ranging up to R34m, and with an average price of R5.5m.
Situated on the north coast near King Shaka International Airport and major economic hubs, Zimbali Coastal Resort is a premier 700ha coastal and golf estate situated along a pristine 3.5km beach bordering Ballito.
Launched in 1996 and having exceeded the 90 percent mark for completed properties, Zimbali will finally be home to 800 freehold residences and 400 sectional title units. In addition to world-class facilities for the benefit of its residents, Zimbali also has an 18-hole Tom Weisskopf championship golf course – rated among the top 30 courses in SA – and two five-star Fairmont Hotels.
Neil de Beer, PGP’s area manager in Ballito, says residential property prices in Zimbali have escalated in some cases by up to 1 000 percent since 1996 and vacant land (including resales) is now scarce.
“New sectional title development units at entry level were up 33 percent over the past four years, for example Sanctuary sold at R2.995m a unit in 2011 and is now reselling at just under R4m. As all land options in Zimbali – including resales, have now been exhausted, this will bode well for capital growth of existing homes, in a market that remains buoyant.
“Developed homes sell from an entry level of around R3.7m up to R10m for sectional title units and R7m for single residential homes up to R38m for beachfront homes, with the average selling price of approximately R8.5m.”
Zimbali attracts affluent home buyers from around the country, predominantly from Gauteng (60 percent), followed by KZN (30 percent), other regions (5 percent) and the balance international – being mostly returning expatriates. The resident owner percentage has risen from 30 to 50 percent due to the growth and popularity of the region and the new airport, which allows Gauteng based buyers to settle their families and commute on business. Many holiday homes are still being bought here with retirement in mind, while younger, family oriented buyers are very much in evidence. According to Lightstone, 74 percent of recent buyers are 18 to 49 years old, with the largest percentage (46 percent) being 36 to 49.
For buy to let investors, long term capital growth is taken into consideration in conjunction with gross rental yields of about eight percent for holiday letting or long term letting. High season rates can peak to R5 000 a day for three bedrooms (and up to R7 000 a day for four bedrooms). Entry level units of R4m can generate over R300 000 a year in gross earnings with more expensive homes in the region of R500 000 to R600 000 a year. Long term rentals for entry level units start from R20 000 a month and can range up to R50 000 for larger homes.
With a fully subscribed and financially healthy golf course which enhances residential capital growth and appeal, Zimbali offers a huge range of amenities that apart from the hotels, clubhouse and restaurants include two spas, tennis, squash, gym, cricket pitch, soccer, volleyball, basketball and netball.
Also in the greater Ballito area, in nearby Simbithi Eco Estate, demand far outstrips supply due to limited land available for new sales – activating a healthy resale market. With prices being achieved mainly between R3m and R7m – and even up to R10m, free standing homes in this estate are in highest demand and sectional title homes on the eco estate are fetching between R2.5m and R5m.
The most expensive freehold home on the market is priced at R38m for a house of about 1 000m2 on a 2 918m2 erf. Resale vacant stands available for sale at present range from R1.85m for 1 100m2 to R6.8m for 2 176m2.
Says de Beer: “Buyers are predominantly aged 30 to 50, mainly locals and from other regions such as Gauteng, Mpumalanga and Free State, plus expatriates returning home from countries such as the UK and Canada and a small number of ‘swallows’ staying for the summer months.
“Again, young families are increasingly turning to this kind of estate environment for security and lifestyle benefits, with a designated children’s clubhouse and this being a pet-friendly estate further adding to the appeal. About 18 percent of residents are golf members.”
Simbithi will eventually have about 1 850 units as well as six community centres with a range of sporting facilities – including an equestrian centre, dams for fishing and a golf course with a clubhouse.
There are 461 completed freehold homes on the estate with another 101 under construction. Two off-plan developments – Fish Eagle and Jacana – are in progress, with construction of the former underway and the other being marketed. With no development land available on the estate since April 2014, there are some re-sale stands available for purchase, priced from R1.99m.
On the KZN south coast, San Lameer is SA’s own sub-tropical paradise, with something to offer the entire family as well as having direct access to two Blue Flag beaches. The estate is on a 169ha nature conservancy, landscaped with 620 privately owned luxury villas surrounding the 18 hole professional golf course, and with a world class hotel. With the perfect year round climate, this is a dream location for golfers, beach lovers and families, and includes jogging and cycling routes, beach and dune trails and canoeing. There are two swimming pools at the hotel with a restaurant, tennis courts, squash courts, bowling greens, a spa and a library.
According to local Pam Golding Properties area principal, Dina Porteous, buyers – mainly from Gauteng as well as locals – want to buy property for short leisure breaks, longer holidays or for retirement in a secure and quality environment.
“Some owners rent out their properties for short term rental income, for example a three bedroom home let out during school holidays from December 2014 to January 2015 achieved total rental income of R152 750. Income can be significantly further increased if the property is rented out on weekends and other periods during the year.”
When it comes to capital growth of homes in San Lameer, in 2010 sectional title sold on average at R1.253m compared with R1.399m in 2014, reflecting growth of 11.65 percent. Freehold properties sold on average at R837 000 in 2010, which escalated to R2.138m in 2014. Over the past 12 months to September 2015, the price range for sectional title properties sold was between R230 000 for a share in a unit and R2.75m with an average price of R1.327m, whereas freehold sales ranged from R500 000 to R18m with an average selling price of R4.76m. Resale stands are priced at R1m for about 600m2, with new stands being sold from R2.5m to R3m for 940 to 1 100m2.