Whatshot
Bugle Sales Talk Editorial
Bugle Sales Talk Editorial
Date: 2015-10-16
To date 274 sectional title units and 230 freehold homes have been completed. At the current 504 dwellings the estate is however only approximately a third fully developed, which means there will still be a lot of new opportunities coming to the market over the next few years. The capacity at build-out is estimated at 700 sectional title units if we accept the maximum zoning parameters and 903 freehold properties.
At a full potential of 1,603 homes Palm Lakes will end up as being one of the largest estates along the north coast. If you are currently looking to buy vacant land in Palm Lakes you have a choice of approximately 30 sites which range in price from R450,000 to R1,295,000. Currently on the market are 10 sectional title units and 10 completed freehold homes, with a pipeline of new pending releases ready to address the demand. Soon to be released are 80 new sectional title opportunities, 60 vacant sites and 70 freehold homes. Independent sub-developers who have bought larger tracts of land from the master developer and in turn develop either sectional title or freehold homes have been a key component to the success Palm Lakes has enjoyed recently, and can be expected to remain as key contributors over the next few years.
It also helps that Simbithi, Dunkirk and Brettenwood Coastal Estate are largely sold out in terms of vacant land opportunities and that the much anticipated Zimbali Lakes Resort still has a question mark over it regarding practical release and development. This is great for Palm Lakes as it means restricted competition for properties within the price range until new green-fields opportunities are brought to the market. In terms of pricing achieved to date, the highest price paid for a freehold home has been R3,500,000 located on a 612 sqm site. This sale was registered in August this year and starts to edge pricing upwards closer to the R4m threshold. The sites within Palm Lakes tend to be smaller on average than the vacant land opportunities in estates such as Simbithi or Brettenwood, and the average land size over the last 254 freehold sales has been 685 sqm.
This has been an important factor in terms of Palm Lakes' strategic positioning as it is able to offer compelling value relative to many other opportunities. Having done an analysis of every registered sale within Palm Lakes from 1st January 2012 to 10th October 2015 as most of the sales action has occurred during this period, we see that the highest price paid for a sectional title unit in Palm Lakes to date has been R2,100,000 measuring 292 sqm in extent. Of the 86 sectional title sales registered over this period with a total sales value of R94,5m, the highest rate per sqm I could detect was R13,953 for an 86 sqm unit that sold this year for R1,200,000. Although the average rate over all the transactions since 2012 is R8,816.55/sqm if we look only at transactions registered in 2015, then the average rate over these 19 transactions is R10,251.57.
We can expect this rate to leap ahead again over the next twelve months. In terms of the age demographic of people buying in Palm Lakes we see that 48% of buyers over the past twelve months have been in the 36-49 year old category. We know from the statistics release by Ooba, SA's leading mortgage originator, that the average age of a first time buyer is 37 years. It is therefore not surprising that Palm Lakes has attracted a younger buyer profile.
For further information and an interactive analysis of this article follow my blog: andreaswassenaar.blogspot.com.
Andreas Wassenaar
Principal - Seeff Dolphin Coast
Cell: 082 837 9094