Strong rental demand among mine contractors in Mokopane (formerly Potgietersrus) is underpinning the property market in this Limpopo town.
Esther van der Merwe, owner of the local RealNet estate office, reports that demand for furnished homes on short contracts is especially high. "Contractors at the platinum mine between Mokopane and Ellisras find it cheaper to rent furnished units for their employees than paying for accommodation in guest houses,” she says. “Short-term rentals of three-bedroom homes that can accommodate up to six employees at up to R12 000 per month are not uncommon in contrast to normal residential rentals of between R4000 and R7500 for unfurnished homes.”
Van der Merwe adds that although residential sales in the town proper nearly came to a complete halt during the recession last year, the market started improving in December. “Activity has picked up but financing remains problematic with long delays in processing bond applications due to the strict criteria of the National Credit Act. In the past the whole process took around two weeks, but consumers now have to allow at least 60 days,” she says. “This is exerting negative pressure on our market.” Property prices have declined in the weaker market, in some cases by up to 40%. Van der Merwe says homes that sold for R960 000 18 to 24 months ago are now offered at prices of as low as R760 000. “Good value at current prices, coupled with the strong rental demand, creates excellent buying opportunities for investors who are not constrained by financing difficulties,” she says.
Prices for townhouses currently range between R500 000 and R1m while full-title properties currently sell at prices of between R650 000 for smaller units to R2m. The market in the Mahwelereng area, on the other hand, was relatively stable during the recession. Van der Merwe says most prices in the traditional black area are still under R500 000 and in most cases banks grant 100% loans for these properties. “We have made great strides in increasing our market share in Mahwelereng, which was the best performing area during the recent recession in terms of unit turnover.”