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Uncertainty saps confidence in Richards Bay marketRICHARDS BAY (May 02) – About eighty percent of residential property sole mandates being listed with one estate agency in Richards Bay are emigration driven with the majority of the balance impelled by job uncertainty, according to one of the KwaZulu-Natal’s town’s leading estate agents.Trudie van der Vlies, broker owner of RE/MAX Marine, says her company is listing about three emigration-driven for sale homes every working day prompted by the mix of higher interest rates, tougher credit conditions, political uncertainty and more recently load shedding. The town, which anchors the country’s largest harbour, the world’s largest coal export terminal and numerous giant industries and operations, has become negatively affected in terms of job security from national load shedding. The unusually high number of emigration property listings is also confirmed, by Loise Freestone of locally based Umhlatuze Properties, who notes a definite downturn in sales in a market traditionally highly dependent on a buoyant national economy. Les Taylor of ERA Unique agency in Richards Bay also reports the local property market experiencing mixed fortunes with the rental market booming, but with sales volumes down, although prices remain pretty stable. Taylor reports the market as basically moving sideways, pending a return to growth in due course, which he and Freestone believes will be at a slow rate, possibly taking between 18 to 24 months. But property positives, according to Taylor, are many and varied. They include the implementation of the R1,2bn Richards Bay Coal Terminal (RBCT) expansion, news that the Tata Group of India is going ahead with an aluminium beneficiation plant and rumours of a new oil terminal to be established between Richards Bay and Empangeni, land for which has reportedly been acquired. “The Somkhele Mining open pit anthracite project is up and running, there are other new developments in the Industrial Development Zone (IDZ), infrastructure upgrades including continued work on the John Ross freeway and upgrades of the Richards Bay airport while there is also progress on the affordable housing front with the Ngwelezane low income housing estate. Taylor adds that the Coal Terminal expansion is scheduled for completion by the first half of 2009, when 91million tons of coal a year will move through the port. “The positive drivers contradict the negatives, though, and as a result the property market presents something of a confused picture right now, with the buy-to-let and rental markets enjoying good demand, but with values staying static. Van der Vlies believes some house price decline has taken place with homes selling about 15 percent below asking price. She gives examples of a R1,5m home selling for R1,4m; a R2m home for R1,820 and a R1,7m for R1,5m. Against the general trend RE/MAX Marine posted a record sales quarter of R23m registered sales and R40m in unregistered sales in the first quarter. The R40m figure includes off-plan sales in new developments. Freestone’s main sales focus has come from Gauteng based buyers purchasing holiday and leisure driven - particularly fishing pursuits – homes. She has personally sold to four in the past four months to these type buyers in the price range of R900 000 to R1,2m. However, she does note a definite slowdown in general purchasing and a drying up of new development activity. Taylor expects the various negative forces will play out over the next 16 to 18 months with the market then resuming an upward trajectory. “The interim period definitely presents opportunities for investors and developers prepared to wait out the tighter times” Van der Vlies also sees good investment opportunity in the current market with her view based mainly on the surge in rentals, which she says has probably tripled in unit volumes in recent months with demand from company staffers on contract work and also conversion from ownership to renting. “Richards Bay,” according to Taylor, “is strategically positioned relative to inland markets and tourist attractions such as the St Lucia wetlands. It’s close to good pools of labour and is easily accessible via dual carriageway from Durban to Pongola while the new La Mercy airport about 75km from Richards Bay will improve links further. It’s only a matter of time before the property market here turns into positive territory again.” |
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