New entrants to the property market in Witbank are boosting home sales with many millions worth of transactions per month now being recorded in the booming Mpumalanga mining town.
On-going construction work on the Kusile power plant is responsible for a continuous inflow of new residents, says Riaan Kasselman, sales manager at the local Chas Everitt International franchise. "The Kusile project is set to last for the next eight years, which bodes well for sustained demand for property in the medium to longer term, especially in the more affordable price ranges."
He reports that his agency has notched up record sales in recent weeks. "In July, for example, we concluded sales to the value of almost R52 million, and in August another R25 million. And most of those transactions were in the under-R1 million category, although there was good activity in all price brackets."
He attributes the strong performance to spiking demand as well as the fact that the agency converted to the Chas Everitt brand earlier this year. "Joining a strong national group enabled us to more than double our sales force and afforded us the opportunity to greatly increase our market penetration."
Demand from first-time buyers, many of whom qualify for bonds on properties costing less than R1 million, has also spurred new development and sales of these units are brisk. Kasselman says buyers are lining up for newly built units in Marelden Estate, for example, which was launched in July. A total of 70 units in the 280 unit estate were sold within two months at prices of around R799 000 per unit.
At the same time, prospective buyers who cannot afford their own homes yet are very active in the rental market and demand is further boosted by newcomers to the town who prefer to rent while sourcing homes to buy. Chas Everitt Witbank currently has more than 350 rental units in its portfolio.
Kasselman says many tenants become first-time homebuyers at the end of rental contracts and that the uptake of any units that then become available is rapid. The strong demand in this sector, especially for units with two bedrooms and a bathroom at monthly rentals of less than R6000, is stimulating new development such as the Cosmopolitan project that is attracting investors.
Kasselman says annual rental escalation has flattened slightly over the past few years but is still higher than most SA rental markets at around 10% a year.
Top rentals of around R60 000 a month are being achieved for large upmarket properties in the town, but these are usually guest houses with multiple rooms and bathrooms with upmarket features that are rented by companies for professional staff working at Kusile or the surrounding mines.