For a list of reasons, many people will opt not to invest their capital into property at this time and may rather look at rental instead. As a result, there will be a much greater demand and the rental market will become more competitive.
Greater Ballito has been on a huge growth trajectory with its population having increased by 83% in only 7 years. Not only has the population grown but there has also been growth in property values as well, with an average 20% price growth year-on-year. Those who have invested in areas, like greater Ballito will see that with growth comes demand, especially for already-established estates in our post-Covid world.
As a niche product, Lush’s value is increased by its placement within Elaleni and unhindered access to all estate facilities. In terms of value appreciation Elaleni has outperformed its counterparts with the value of land transfers at an average of R2.2 million.
Lush has a large investor-owner base of about 50%. Most of these owners have bought with the idea of maximising on the demand for secure rental opportunities within premium residential estates in greater Ballito. Furthermore, investors want to secure a return on their investment, even if that means incrementally through rental income, as property is a safer option than the volatile stock market. What we are seeing now is that property is becoming increasingly popular as an investment vehicle to grow wealth.
The low interest rate also means investors can service their bonds with greater ease, using rental income to pay off interest on a home loan. A wise course of action would be to take the monthly bond savings and put them back into the bond to start servicing the capital amount, effectively shorten the lifespan of the bond. If one does their sums and invests wisely, this can be done without extra cost to the property owner. Investors can potentially earn more from lower interest rates on their bond on their asset than with money sitting in the bank earning interest.
Rental income does not only include long-term leasing. Airbnb reports that Ballito has a severe under-supply of short-term and holiday rentals, therefore making a development like Lush a lucrative opportunity to earn a rental income.
What insight has shown is, whether renting or buying property, people want safety and security and the kind of amenities that living in a freestanding home just cannot offer them. For this reason, residential estates will become even more desirable, and property owners will be the ones to reap the rewards by capitalising on rental demand.