Area Review: Property in Lephalale (Ellisras) poised to take Off

Private Property South Africa
Jane Wessels

You’d be forgiven for now knowing where Lephalale, (formerly Ellisras) is – until recently, this unassuming town has stayed under the radar.

Originally part of the farm Waterkloof, the town was granted municipal status in 1986, and is home to the world’s largest dry cooled power station (Matimba) as well as Grootgeluk, the world’s largest open cast coal mine. The town is located west of Polokwane, and north of Rustenberg. In fact, it isn’t far from the South African border with Botswana. In other words, it’s far from any large cities. But what makes Lephalale special is what is going to be happening there in the next 25 years. According to locals, the town is the future of power generation in South Africa, and if latest developments are anything to go by, they’re not wrong. The recent announcement by the World Bank approving Eskom’s multi-billion rand loan sealed the deal –the Madupi power station is underway, bringing with it the expansion of local coal mines and the promise of greater wealth for the entire region. Exxaro, SA’s biggest black-empowered mining company, reports that an additional 2500 people will become permanent residents of the town by October this year, a the population is expected to grow even further as the power station and expansion of the coal mines progress.

Which begs the question: where are all these people going to live?

According to Margie Geyser, principal of RE/MAX Adventure Properties, property price growth stayed virtually static in 2009, compared with growth of 20% and more in each of the two years preceding it. Mostly, she noted, because the industry was waiting for the finalisation of the power project. “However, the new contracts that are being awarded now will ensure a large growth starting in 3-4 months time,” she says. Margie is confident that the coming years will produce a strong growth in the property industry, given the large numbers of residents expected in the area. Marius Greyling of Waterberg Harcourts is also very positive about the potential for growth in the region. “You can’t find a 2 bedroom apartment to rent in Lephalale for under R6500 a month,” he says, “and there’s very little housing available at the moment in Lephalale.” A new 59 000sqm shopping centre is due to break ground in August this year; bringing with it major anchor tenants and some much needed office space in the town.

“They’ll need 800 properties just for the employees at the shopping centre, without taking into account any housing requirements from the mines, and the rest of the spin-off industry it will bring.” Marius is excited about the benefits this growth will have for the people of the town. “It’s good for industry, and for farmers. It’s also going to create lots of jobs, and help to lift this town economically to a different level.” So what, exactly, are the facts? It is estimated that by 2025, the Waterberg region will incorporate 5 power stations, 3 to 4 coal mines and 2 petro chemical plants. This is largely because the region holds an estimated 55% of SA’s remaining coal reserves. Sasol and Eskom have each predicted that 20% of their total workforce will be located in the area within the next 6 months. According to the Lephalale Economic development Company, Lephalale will be as large as Rustenberg and Polokwane combined by 2020, and will double its permanent residents by 2025 to 240 000. A simple online property search revealed that property for sale in the area is very competitive. A 2 bedroom apartment for sale in Lephalale will set you back around R500 000 to R600 000, and there’s not much stock available. Houses for sale in Lephalale are surprisingly expensive – while you can pick up a ‘fixer-upper’ in the R900 000’s, you can easily pay up to R2million. Some websites only have stock starting at R2 500 000, however these are obviously more upmarket. There are also some new developments in Lephalale, with a few options to buy off-plan apartments, however it’s doubtful that the level of activity will remain this quiet for long. You don’t need to be a rocket scientist to see the potential for property in Lephalale at the moment. The development in this area, both short and long term, guarantee the need for many more homes to be built, and a willing rental pool for savvy investors who get in on the action now.


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