Zimbali is still a great investment
As part of our Seeff market trend analysis initiative, I recently carefully analysed 451 property transactions concluded in Zimbali Coastal Resort between 1st January 2014 to 30th June 2017.
Three and a half years flies by on the one hand but this relatively short period has yielded in excess of R2,4bn in sales in Zimbali alone. Some interesting aspects of the Zimbali property market emerged as I interrogated the data. Did you know that only R885,4m in mortgage finance or 36.33% of the total R2,4bn in sales was used to finance these property transactions.
What does this mean It means that R1,551,971,095 in cash - yes that is close to R1,6billion, was used to pay for these sales. That is a lot of cash flooding into Zimbali. No other estate in South Africa has attracted this level of investment over the past 3 years.
Considering only freehold home transactions over this period, we see that R833,6m traded hands represented by 90 transactions. This category of sales represented 34.2% of the total sales and the average price was R9,262,132. Given that Zimbali is at the end of its development cycle, only R87m in development site opportunities were recorded.
Developers tend to pay for sites in cash and the figures re-inforced this with only R10,4m in mortgage finance raised to help finance these sales. The single residential vacant land sales over this period amounted to R343,1m with only 29.4% or R100,9m in mortgage finance being used to pay for these sales. Over two-thirds of people who bought vacant land in Zimbali over this period therefore used cash. The average price across these 98 land sales was recorded as being R3,501,052. The highest price recorded for a single residential site was R12m.
The sectional title market in Zimbali is an interesting one as you have two distinct sectional markets - the typical apartment or townhouse within a cluster development within the estate and the hotel suite type of property. Over the past 3 years, R955m in traditional sectional title homes have traded, representing 39,18% of the total sales. It is interesting to note that people use more mortgage finance to pay for sectional title investments with the figures showing R400,5m in mortgage finance used to help finance these purchases.
The average price across the 183 traditional sectional transactions was R5,218,311. A very useful statistic that emerges from these sales is that across the 61,399 sqm of sectional space traded, the average price per sqm is R15,553. This is very useful to know and use as a value benchmark when considering purchasing a sectional title property.
The Fairmont Hotel sectional title sales for the period 2014 to mid 2017 amounted to R218,7m or 9% of all sales. What is fascinating is the rate per square metre achieved on these transactions. Across the 5,474 sqm traded the average rate achieved was R39,952. The highest average rate was achieved during 2015 at R42,009. This is impressive and starts to compete with rates achieved in places like Cape Town.