By Pauline Larsen
 
If you thought you'd compensate for missing the apartment boom in Sandton by snapping up flats on Durban's up-market Musgrave ridge, think again. Swaying palm trees and views of the bay have driven prices up into the R3-million - R4-million range in the past year. One apartment sold for R18,5-million.

Three Five Five Musgrave Road is a case in point. Developed by the Reardon Group, the building offers 22 three-bed and five penthouse apartments, with prices starting at R3-million.

The units are sold out and though the building is not yet complete, it seems some buyers have already sold for a profit. A unique feature is that occupants can drive their cars directly up to their front doors.

But the financiers of these sales have been exercising caution. At Three Five Five, Standard Bank Properties has insisted on a presales requirement.

"We required a presale scenario of 21 units prior to any finance approval or payment," explains Standard Bank Properties MD Stewart Shaw-Taylor.

He adds that deposits from end users or purchasers are 15%-20% of the purchase price.

Pam Golding franchisee Dina Soukop, who handles the Musgrave area, says top-end prices have risen by 20%-30% in the past year, mainly because of a lack of stock.

"There's little land available for development and, where developers can find land, 1,000 m² costs close to R1-million," she says. She cites the case of a 100 m² two-bed townhouse that was bought for just under R700,000 two years ago and recently changed hands for R1,3-million. "A nice unit but not exceptional," she says.

Soukop believes that old, established suburbs like the Berea, with good schools and heritage buildings, will always be desirable.

Rocketing costs are putting these properties beyond the reach of the average buyer. Prime sea-facing flats on Durban's Berea compare with those in Sandton for price.

In 1993, you could pick up an apartment on Musgrave Road for about R216,000, according to the SA Property Transfer Guide. During the 1990s the average price slowly rose to R506,000. But that figure is misleading because at the top end of the market apartments have sold for more than R18-million.

Though the Berea may have a dearth of stock, apartment development is picking up at The Point and in Umhlanga.

Financial Mail

Publisher: Financial Mail
Source: Financial Mail