Gated communities are becoming increasingly popular ostensibly driven by our desire for security. After all, according to Maslow’s Hierarchy of Needs, a human’s need for safety ranks second only to physiological needs like air, water and food!
However, is security the only driver of the increased demand we are experiencing for gated community living along KZN’s North Coast, or are there other significant factors at play?
We have all heard the old adage “Location, Location, Location” when considering the purchase of property. Whilst this still rings true, quality management of a location is becoming an increasing determinant of property demand.
Depending on where you live, the areas around you are either maintained publicly by the municipality, privately by your body corporate or homeowner’s association, or by a mix between the two.
Some examples of the latter in our area include the management of the Gateway surrounds by the Umhlanga Ridge Town Centre Management Association (URTCMA) and the upkeep of parts of Umhlanga by the UIP. These are both examples of private organizations partnering with public to ensure a high standard of service delivery.
As Brian Wright, head of the Umhlanga UIP explains, public spaces need to be well managed in order for an area to flourish. By well managed, he means creating public environments that deliver high quality experiences. He believes that quality public spaces tell a story – that people care – and that this has a profound effect on protecting and enhancing the value of investment in an area, and hence the demand for it.
Some examples of this include the Christmas lights that the UIP erects in the Umhlanga Village each year and the new children’s park that the URTCMA has established West of Gateway behind the fire station. The 10,000m2 park includes playground equipment catering to all ages from toddler to 15 years, a running/cycling path and a mini sports field with onsite supervision and security.
Areas that are clean, secure, well-maintained and aesthetically pleasing with a strong focus on green area development are some of the major ingredients for creating high quality environments.
These types of living spaces, in turn, give rise to quality lifestyles. Most gated communities are well managed and offer facilities including tennis courts, squash courts, golf courses, restaurants, clubhouses, dams and walking and cycling areas.
They are family-oriented and lend themselves to healthy, wholesome outdoor living where residents can reconnect with nature and children can play and explore outdoors instead of electronic couch-surfing.
More than this, gated communities begin to address the next level of Maslow’s Hierarchy of Needs, namely, “Belonging”. I believe that, despite demographic differences, residents have a shared common interest and a real sense of belonging and community that contributes to their happiness.
Naturally, the increasing demand for gated community living is driving up property values. Statistics drawn from the Deed’s office for the suburbs of Umhlanga and La Lucia show that prices of freestanding properties grew by 43% from 2005 to 2010 versus sectional title growth of 33% for the same period. However, in the last five years, this statistic has reversed, with sectional title prices growing at 34% versus freestanding of 28%.
I understand that a minority of people feel that community living impedes their freedom with respect to decisions about staff accommodation, pets and property alterations. However, I believe that the combination of security, quality of environment, lifestyle and wellbeing are cumulatively driving demand for gated community living and evidently prices are responding accordingly.
It is clear that an increasing number of our well-managed environments are either privately managed or are managed jointly between public and private.
Next time you purchase a property, remember to think “Location, location, location management!”
We’ve all heard the old adage “Location, Location, Location” when considering the purchase of property. Whilst there is much truth to this statement, quality management of a location is increasingly becoming a determinant of property growth.
In 2007, Umhlanga Village was facing rising commercial vacancies attributed to growing urban decay and increased competition from the managed precinct on Umhlanga Ridge. This had the effect of severely impacting growth in commercial and residential property values in and around Umhlanga Village.
Fortunately for property owners, businesses and holiday-makers alike, the Umhlanga Urban Improvement Precinct (UIP herinafter) has not only managed to stem this tide but it has also firmly re-established Umhlanga as one of the most desirable holiday destinations and property investment locations in the country.
The Umhlanga Promenade UIP was founded in 2003 by Southern Sun. In 2007, in response to urban decay in the Village, Brian Wright was appointed to establish the Village UIP. Today, Brian heads up both UIP’s, which are operationally managed as one precinct that includes four adjacent managed areas spanning Umhlanga Lagoon in the North to Eastmoor Crescent in the South.
The UIP has grown considerably over the past 6 years from a staff compliment of 5 people with a budget of R800,000 to over 70 staff members today with a budget of R7,5 million. This funding is 100% private and is provided by commercial and residential property owners in the area.
As Brian enthusiastically explains, public spaces need to be well managed in order for an area to flourish. By well managed, he means creating public environments that deliver high quality experiences. He believes that quality public spaces tell a story – that people care – and that this has a profound effect on protecting and enhancing the value of investment in an area.
One example of his philosophy of creating experiences can be seen in the Christmas lights soon to be erected in Chartwell Drive and Lighthouse Road at the entrance to the Village.
Broadly speaking, the UIP has a dual focus. Firstly, to provide services on the ground in the form of cleaning, maintenance and security with a strong focus on green area development. The UIP also serves as a go-to point for service requests whilst providing credible and relevant news feeds from advisories to events. The UIP works with the municipality to ensure that public services are being performed to the required standard and then fills in the gaps where necessary.
Secondly, the UIP is focused on lobbying the municipality for improvement in municipal services and investment in infrastructure. The organisation has embraced the municipality and its stature has grown as a solutions-focused organisation that, importantly, brings resources to the table.
Clearly, our beautiful promenade and burgeoning commercial hub is no serendipitous event and we owe much to the UIP team for its dedicated efforts in realizing its goal of providing a quality managed area in which we can live, work, play and invest!
So how have properties in the UIP precinct performed against the national average over the past 5 years? This is potentially an interesting mathematical exercise and one that can be deliberated upon for hours.
I pulled Deeds Office data for all sectional title units in Lagoon Drive, which have sold twice over the past 5 years (excluding outliers). By comparing each unit to its own prior sale price we get an accurate measure of growth and avoid the distorting effects of market composition.
The average price growth over the period for these units was 8.8% per annum. By comparison, the FNB Property Barometer report quotes national growth over the same period as 5.9% per annum. Thus the growth performance of properties in Lagoon Drive exceeded the national average by 49% per annum.
I strongly believe that the UIP is a significant contributor to the performance seen in this representative sample of properties. Thanks to its input, we enjoy a beautiful promenade, clean beaches and quality restaurants, which have been attracted to the area. These factors have a positive effect on the perception of the Village and thus on its property values.
In addition, the fact that there are developments and upgrades to the precinct worth more than R5bn, either in construction or in planning, is a clear indication of the confidence in the Umhlanga Village property market.
Clearly Umhlanga Village ticks all the checkboxes from a property investment point-of-view: Location, Location… Location Management!