Mining a boon to Limpopo towns

2012-04-07 14:13

Burgeoning platinum and chrome mining activities in Limpopo’s eastern area have turned the small towns of Burgersfort and Lydenburg into a property investors’ paradise.

Gerda Whitehorn, a property consultant for Pam Golding Properties in Lydenburg, says the huge demand for rental accommodation and homes in the area has buoyed prices.

“We get on average six to 10 families looking for rental accommodation daily in our office and we simply battle to get stock at reasonable prices. This overdemand has resulted in overpriced rental accommodation such that an inferior three-bedroom house could let for up to R8 000 a month,” says Whitehorn.

“Local developers can’t stay abreast with the need for rental accommodation.

“Guest houses are chock-a-block during the week with service providers to the mines – a good investment therefore,” she adds.

Burgersfort and Lydenburg are 50kms apart in Limpopo and Mpumalanga, and they have been experiencing this overwhelming demand over the past couples of years due to 28 mining companies doing business in the Sekhukhune area.

The area has the biggest platinum reserves in the world and the life span of the mining companies is approximately 100 years.

An amount of R207 billion has been committed to mines, smelters and infrastructure development.

More companies have acquired mining licences, which will see mining activities escalating even more.

Cranbrook Property chief executive Hoffman Prinsloo estimates that the influx of people into Burgersfort will need 20 000 new houses within the next 10 to 15 years.

Prinsloo says that Cranbrook decided to develop in Burgersfort and Lephalale because of indications that Limpopo would be a major contributor to national

wealth by 2020 with a mandated R103.77 billion expenditure from mining, power generation, railways, major roads and municipal infrastructure.

“Couple this with the changes in the Mining Act, which require mining companies to show models of end-user ownership, as opposed to the old models of corporate ownership, mining companies are desperately looking for housing solutions,” he says.

“As a group, we are increasingly required to assist the sector with long-term rental, rental with an option to purchase solutions – housing solutions that run over long durations – for example, 10 years,” Prinsloo adds.

Whitehorn says that the average lower-range buying power for houses has increased from R800 000 to R1.2 million since last year.

“We have been busier than ever since the beginning of January and desperately in need of more stock in the below-R1 million bracket,” Whitehorn adds.

She says that house prices in the area have increased 200% since 2002, such that:

» One- or two-bedroom apartments sell for between R550 000 and R660 000;

An average two-bedroom house costs R730 000;

A three-bedroom house with one garage sells for between R820 000 and R977 000, while a three-bedroom house with a double garage goes for R1.3 million;

» A four-bedroom house is worth R2.2 million; and

» Stands of 530 to 650 square metres in residential developments range from R220 000 to R400 000.

The mining potential has also seen three shopping malls being constructed in Burgersfort.

A new private hospital, a casino and two private high schools are on the cards.

“Lydenburg has a new shopping complex and now is home to Shoprite and Checkers, Pick n Pay and Spar.

“Plans for a mall and other developments have been put on ice because of lack of infrastructure – water, sewer connection and electricity – which is a huge problem, hampering growth,” Whitehorn says.

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