Byline: Roxzanne Van Eyk
Johannesburg, Feb 03, 2006 (Business Day/All Africa Global Media via COMTEX) — THERE are some investors that can afford to buy into country homes, which in some areas do not come cheap because of their unique and sought after nature.
One would think that the buyer profile would be made up mostly of foreign investors who are paying in pounds or dollars. Surprisingly enough, many estate agents report that buyers are mostly local. There is foreign interest, but it is pleasing to know that the majority of buyers remain local. To perhaps shock you once more, in some areas, the local buyer profile is also partly made up of those that live in relevant proximity to the country development — a reasonably small percentage, but a percentage nonetheless.
Barak Geffen, executive director of Sotheby’s International Realty, operated by Lew Geffen, says: “Apart from second-home buyers many city slickers are choosing to relocate to smaller towns and commute to Gauteng or Cape Town, or to start up small businesses in these areas. These buyers generally prefer to buy into country estates for their security advantages.”
Keith Wakefield, CEO of Wakefields Estate Agents, says that in the KwaZulu-Natal Midlands, as such the lion share of interest in country -type properties is from Gauteng and the UK, although there have been buyers from Durban and other parts of the country.
“The trend is from city and suburban living to country living and the Midlands is particularly popular for its location and the lifestyle it offers. This is an area where families can grow up in a natural environment, with clean air and plenty of outdoor activity.”
The Midlands Meander, a very popular tourist route, has over the years also acted as a magnate drawing many Gauteng investors looking for business opportunities and a catalyst for increasing property prices. “In less than 18 months or so property prices have doubled in the Midlands region,” says Wakefield.
People relocating to these so-called out of the way areas are willing to commute and, in some cases, leave their families for a few days while they continue with their usual business.
For those who are not willing to commute, there are various country developments that have the appeal of being separated from urban sprawl, but have easy access to business and industrial areas via highways.
Eshowe Hills Eco Estate is one of these developments. It has the appeal of being located far out. However, the development actually has easy access to business centres, as well as to tourist destinations such as the Zululand battlefields, Shakaland, game reserves, greater St Lucia wetlands and coastal resorts.
Dave Davenport of Eshowe Hills Eco Estate says that buyers into the estate in particular are foreign investors from London, as well as Capetonians and Gauteng residents. Other buyers include businessmen working in Eshowe, farmers who commute to their farms daily and retired persons and investors who are looking for a home with holiday and recreational potential.
Chris Immelman, a director of the international and projects division of the Pam Golding Property group, says that the reason for investors in such properties is the perceived security that buyers can obtain.
This includes personal freedom such as allowing your children to cycle safely in the estate until after dark. Buyers and their families also have the freedom to move around in the open spaces and are not limited to just the back garden. There is also the inclusion of the Home Owners Association (HOA) looking after the maintenance of the estate, and in turn your investment as the future appreciation of the property will be positively affected.
Most estate agents concur with Immelman’s views, including Geffen: “Buyers like the fact that many of these homes are newly built, the grounds are maintained and offer access control and 24-hour security.”
Craig Mcfadyen of Sotheby’s International Realty, operated by Lew Geffen in Nelspruit, says: “There is huge buyer interest in eco estate- type developments here, which draw on and preserve the natural beauty in the area. The aim is to have as little impact on the natural environment as possible. Therefore there are large restrictions on what one is able to build and limited numbers of stands. As a result there are fenced estates where small game wanders freely.”
Immelman says that the extent to which country-type estates have appreciated over the past year varies. In some instances, these types of property offerings have doubled in price. “Most, however, would have shown approximately a 15% to 20% increase in growth,” says Immelman.
The significant local and international publicity surrounding these new country developments have had a positive effect on the economy by bringing in additional revenues and helping smaller towns develop and prosper all year round.
“The first phase of the R2bn Val de Vie development, consisting of 220 plots, sold out in just two weeks in 2004. The second phase followed suit with all 150 plots selling prior to launch, such was the demand for this type of estate,” says Geffen.
Verna Sherlock of Sotheby’s International Realty in Hillcrest says: “One of several big developments in Hillcrest is Kirtlington Park. Four years ago one could buy a plot here for R200000 and units are now selling at R3m to R5,5m.”
Niel Cronje, CEO of Engel and Volkers Pretoria, says that in line with most other properties in SA, the growth for country homes has been tremendous — 25% to more than 30% in some cases.
Interestingly enough, Cronje adds that the relatively long waiting periods, from purchase to transfer in country estates, provides buyers the chance to obtain capital growth before starting to pay for the property.
These growth figures are a clear indication that country developments can provide a solid investment option. This is likely because more and more buyers are realising the exceptional value of security estates as a lifestyle choice.
Copyright Business Day. Distributed by All Africa Global Media(AllAfrica.com)