Properties along the KwaZulu-Natal coast were headed for a bumper year, with prices expected to steam ahead of the national average and the north coast posing a challenge to the Cape's supremacy, Trafalgar CEO Neville Schaefer said last week.

Schaefer based his comments on the growing demand among Gauteng and international property owners seeking investments in coastal properties. The boost in international tourism to SA was also fuelling demand for foreign property purchases.

"Even Zimbali and other top resorts are still bargains , despite the strong rand ," Schaefer said.

In November, TongaatHulett's property arm, Moreland Developments, signed a joint venture with International Financial Advisors that saw the Kuwaiti-listed multinational corporation acquire 50% of the exclusive Zimbali Coastal Resort, near Ballito. It also undertook to invest $100m in the development in the next decade.

A month later an invitationonly auction for prospective buyers saw 27 sea-facing stands at Zimbali come under the hammer.

Schaefer believed Tongaat had influenced development standards along the KwaZulu-Natal north coast, ensuring the region "was not deteriorating as fast as most of the rest of SA's coast". This would become a major factor in growing the demand for holiday homes along the coast.

He said in addition to the interest coming from Gauteng and internationally, rising incomes in Durban were also pushing up residential rents, particularly in established suburbs such as Berea and North Beach.

"The province's violent recent past is behind it and confidence is rising to levels not seen since the 1960s and will jump further (after) the general election," he said.

Excluding the commercial and residential boom on the Umhlanga Ridge, Durban has not experienced the overdevelopment of residential properties .

The Umhlanga growth was stimulated by Moreland selling off the land previously under sugar cane. More than R10bn has been developed in properties in this way in the past five years.

Schaefer said that if national residential prices increased in line with predictions of 15% to 18%, KwaZulu-Natal prices could increase more than 20% this year.

Business Day