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Sunday Oct 10, 2010

Property subdivisions increasingly frequent in KZN

Property subdivision is gaining in popularity as more people move to the city, plots get smaller and living becomes denser.

And KwaZulu-Natal estate agents say recession-shy developers are now taking an interest in vacant pockets of land.

Harcourts Africa's Martin Schultheiss said in the UK 25 percent of new houses were built on subdivided land, including many "back gardens".

"The trend is visible in South Africa and the reasons are plain: land is becoming scarcer and it is often cheaper and easier to build in developed areas because of existing infrastructure."

Seeff's Tony Hickman said building costs influenced a buyer's decision to recycle an old house.

Plot prices vary widely. Recent vacant land sales include a 2 227m2 site in Cowie's Hill selling for R820 000 and a 1 498m2 level stand in Westville North going for R405 000.

"Kim Woods of our Berea branch reports there is virtually no vacant land left on the Berea, although they sold a 600m2 stand there for R2 million and another of 680m2 for R990 000.

"In Queensburgh, Jan Vermeulen quotes building costs in complexes at R4 500/m2 and the average price of a 1 000m2 stand at about R500 000.

"Gregg Wilson of Hillcrest says there is a lot of vacant land for sale, with asking prices ranging from R350 000. A price of R500 000 was achieved for a dead-level, walled site with a pool next to Hillcrest High School."

Elwyn Schenk of Pam Golding Properties said the market was responding favourably to interest rates and developers were taking advantage of the slowdown to negotiate competitive building costs.

In gated estates around Umhlanga, prices started at R895 000, for Bahia Club, for example. A site at Hawaan cost about R1.4m.

Chris Tyson of Tyson Properties said a number of properties on the Berea had been sold purely for the value of the land, on average R1 500/m2, "but we have seen land sell for up to R5 000/m2.

"Subdivided land in good areas remains popular. This is often preferred to a complex where it can take up to five years before a development is complete."

Pat Acutt of Acutts said prices were subjective. "In Phoenix, the average plot size is 300m2 and readily available at about R400 000. Yet a prime 1 650m2 corner stand in Salt Rock hasn't moved at R650 000.

"Moving up to Hillcrest and Everton, where vacant land is available, but with little sales movement, there is a mix of 2 000m2, 8 000m2 and 20 000m2 plots. Prices vary depending on position from R250 000 to a plum plot with views at R1.3m. Building costs sit somewhere around R6 000/m2, but this is defined by finishes."

Mike Bennett of Proprop said Durban plots varied in size from 600m2 to 2 000m2 and the value of the plot was dictated by zoning.

"A residential property in Westville that has been subdivided is easy to value, as the plot value is normally 25 percent of the average house price in the area. This formula works well anywhere."

Owen Dormehl of Dormehl Property Group said owners of large stands in Westville, Kloof and Hillcrest were subdividing and selling off the land.

"But, subdivision is usually a long and drawn-out process and fairly costly, with the burden of higher municipal rates."

Mike Stanley of Stanleys said in Durban North and Glenashley there was little vacant land for development.

"Some buyers have bought properties, demolished them and rebuilt a home of their choice. The average stand in Durban North is 1 012m2 and a run-down property fetches from R1.7m."

Jean-Robert Bonnin of Bonnins said recent land sales included 1 200m² in La Lucia for R1.7m or R1 467/m2. A site of 1 400m2 in Umdloti recently sold for R3 500/m2.

Keith Wakefield of Wakefields said demand for land differed from one area to the next. "Berea is an area where there is no vacant land while demand for accommodation is high - bigger plots of land with sea and city views are rarely subdivided there especially if the owners run the risk of losing their views."

KZN Property

    
 

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