Rentals rocket in Mokopane

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Renewed activity at platinum mines near Mokopane has boosted the town's economy - and prompted a sharp rise in residential rentals over the past year.

Esther van der Merwe of the local RealNet estate agency reports average rental increases of 20% in the past 12 months.

"Admittedly the increases come off a low base  - a result of the economic downturn in 2009 which led to mine closures and large-scale retrenchment - but the performance of the rental market this year was nothing short of spectacular," she says.

In some cases rentals increased by nearly 50%, she says. For instance, some family homes with three bedrooms that were rented out for about R4500 in 2010 now easily achieve rentals of R6500 a month.

"Demand remains strong and we expect the trend will continue in 2012. The mines, by far the largest employer in the area, are still appointing contractors and new employees, all of whom need accommodation," she says.

The influx of new employees has also stimulated the buyers' market. Van der Merwe says new permanent employees are keen to buy homes of their own and it is notable that black buyers now dominate in the market. "They have a strong culture of saving and are generally able to come up with the minimum deposits required by banks.

"They typically target newer units and prefer developments that offer high security. Single buyers typically buy townhouses in the R500 000 to R850 000 price range, while those with families buy larger units in the R800 000 to R1,2m range.

"Buying vacant stands and building their own homes is now also a very popular option and permanent workers who have saved deposits have no trouble obtaining finance of up to R2,5m to build their homes," she says.

Meanwhile, says Van der Merwe, white workers are targeting older properties in more established areas, as they see opportunities here for upgrades and subsequent value growth.

Investors in rental units were never really absent from the market, even during the sharp decline experienced last year, but the growth in rentals has stimulated renewed interest, she says. Developers were also quick to cash in on the greater demand and two new developments will shortly be launched - one this month (December) and the other in the first quarter of next year.



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