The
most frequently asked question most property professionals deal with is how the
market is doing? It is a question we ask our selves often and spend many hours
researching sales data so as to identify specific trends that may be emerging.
An intelligent response would have to include an insightful analysis of actual
registered transfers. For those who have been involved in property transactions
for any length of time, you soon realize that a sale is not a sale until the
transaction has been registered in the deeds office.
We decided to download
every deeds office transaction recorded for the suburb of Port Zimbali from 1st
January 2010 to 8th Dec 2012. The transactions relating to neighbouring
Port Zimbali Estate and Hilltop Estate were excluded, as was the R100,000,000
sale (registered) of Ptn 13 of erf 1566 of lot no 52 (old Pottery Gallery
site). This 7,2ha site was sold as part purchase of the similar sized
neighbouring property for a similar price. With a further R200m conservatively
spent on infrastructural upgrades to this amazing 14ha residential property,
this is the most likely candidate for most expensive South African residential
property. Focusing on our Zimbali Coastal Resort transactions, my data sample
was further divided into sectional title transfers and freehold transfers. The
22 Fairmont Hotel sectional title sales recorded over the period were also
excluded as these were seen as a hospitality investment product rather than a
residential property purchase. The remaining 49 sectional title transfers with
a gross sales value of R489,520,995 within Zimbali then became a key sample to
interrogate. On the freehold side the transactions were split between 110 vacant
land sales and 48 sales of completed homes. The vacant land was further split
between 100 single residential site sales and 10 development site sales. The
highest transaction recorded on a development site opportunity was the
R43,320,000 purchase of Erf 25 (old Metallon owned hotel site) which has been
beautifully converted into 13 single residential sites, 6 of which can be
regarded as the finest beachfront opportunities within South Africa. At R12m
plus vat for this type of opportunity, it is not for the fainthearted, but will
most likely result in some of the highest value homes within Zimbali Coastal
Resort. The purchase of Erf 107 Milkwood Drive was included in the 100 single
residential site sales even though this property had an incomplete structure on
it. The property has been redeveloped by a local developer and was purchased
largely for its ground value rather than the value of the brick and mortar on
the site.
So
armed with an excellent sample of 100 freehold single residential site sales,
48 freehold home transfers and 94 sectional title transactions, our analysis
was able to provide some interesting insights. The selling price rate per
square metre for sectional title property transactions is usually a very good
guide for pricing similar units and to get a handle on whether your property is
priced correctly. Rates per square metre across these sales ranged from
R6,015.04 for a Nedbank repurchase at R3,2m of 9 Pinnacles, a 532 sqm villa,
which was then unsold at R6m, to R27,925.53 for a magnificently positioned and
presented top floor Imbali Lakes apartment measuring 376 sqm. The average rate
per sqm across the 35,140 sqm of sectional title units traded was R13,930.59. A
unit would have to be something quite special to be priced much above this
average rate.
The single residential site vacant land opportunities traded
between a high of R10,5m for a beachfront site along Corkwood Drive to an Eagle
Crescent site at R310,000 (again a Nedbank repurchase which was quickly sold on
for R535,000). This property was developed and sold for R5,350,000 – always a
good investment when the land is acquired at the right price. The average rate
per sqm for vacant land across the R237,694,239 of single residential site
sales was R1,610.53. Interestingly the R129,702,000 of development land sales
only yielded R835.04/sqm, making it almost twice as valuable for a master
developer to sell single residential sites where possible rather than
development sites, excluding the extra cost of infrastructure possibly required
to service individual sites.
The 48 freehold homes traded between R4,250,000
for a triplex unit in Ihlati (they look like sectional title but are actually
freehold) and R25,500,000 for a Milkwood Drive home. The average rate per sqm
for developed homes, considering only the erf size, across the 67,988 sqm of
developed land traded was R6,484.29.
This new year is expected to see a renewed
demand for Zimbali properties and we look forward to being of service to the
buyers and sellers.
(Author: Andreas Wassenaar, 20 December 2012, published in the Zimbali Bush Telegraph)
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