Investors are buying with holiday accommodation in mind
Durban’s growing appeal as a tourist destination is having a knock-on effect on the property market, with investors snapping up properties to let for holiday accommodation.
Properties with self-catering short-term lets, guest house and B&B potential are some options proving to be popular.
Craig Woods, managing partner at Tyson Properties Commercial in Morningside, says as the property market in general is relatively quiet, investors are finding opportunities in the form of residential homes that can be redeveloped or split, or B&Bs that can be rented out.
The emergence of Airbnb as a way to earn “great returns” is making this lucrative.
Carol Reynolds, Pam Golding Properties area principal for Durban coastal, including Durban North, Umhlanga, and Umdloti, says there has been an increase in investors looking to purchase units with Airbnb potential.
“This is a strong driver in our area, particularly in the coastal developments with sea views and good security..”
However, she says the trend is more towards Airbnb offerings than established, registered guest houses.
“Rates on guest houses in the eThekwini area are very high and this detracts from investor appetite.”
In the general Durban area, Pam Golding Properties area principal Michelle Burger says buyers often seek property for investment purposes, both long-term and holiday letting.
Student accommodation options are also appealing to investors, Woods says.
“Manor Gardens is very popular for student accommodation, while the Glenwood and Morningside areas are being targeted for redevelopment. B&Bs and bigger guest houses are being acquired and redeveloped for the holiday market.”
Because tourism is an important part of the local economy, an investment focus for the future will be on acquiring properties in good areas close to amenities to be used for Airbnb.
“But I also think we will continue to see B&Bs and guest houses bought by local developers and targeted for redevelopment for different housing options for locals, such as co-living,” Woods says.
While Umhlanga and Sibaya are in “high demand” from a holiday letting perspective, Reynolds cautions buyers to be mindful that short-term letting is only permissible in certain complexes.
“In Durban North, there has been an increase in the number of clients wanting family homes with garden cottages which they can rent out for Airbnb income.”
Generally, investing in properties with tourism returns in mind is a good strategy.
“KwaZulu-Natal has the best climate in the country, as well as the most user-friendly beaches with warm ocean and consistent surfing conditions. As a result, our market is not seasonal and this bodes well from an investment perspective as there is year-round trade. Add to this the combination of tourists and business commuters and it is easy to see why KwaZulu-Natal is becoming more and more attractive as a property investment node.”
The beachfront, CBD, Morningside and Glenwood are in demand as you can purchase sectional title or share block flats that can provide good returns, Burger says, adding the municipality’s “big plans” for the harbour, Point area, Esplanade and CBD could further encourage tourism property investment if they come to fruition.