20 Sep 2012
The inflow of contractors working on Eskom's Kusile power station near Bronkhorstspruit is boosting the town's economy tremendously and has led to a scramble for residential property.
Rental units are in short supply and investors are active in the market, says Anita Groenewald of the local Aida office.
The rental market was under pressure even before construction of Kusile started and the shortage of units is now becoming critical, she says.
Around 4 000 contractors and construction workers are currently working on the project and the number is expected to rise to about 12 000 before completion in 2017, she explains.
“New residential development is not keeping pace with demand and two new coal mines in the area are expected to pile on further pressure."
The strong demand has attracted investors who have, she says, already snapped up most bachelor and one bedroom flats in the small town.
Monthly rentals for these units average R2 250 and R3 000 respectively.
A trickle of two bedroom flats for sale are priced from R550k and are selling fast to investors as well as new residents. Rentals for these units average R4 400 per month.
Prices of three bedroom flats start at around R700k but stock is also scarce. Small two bedroom full title units in Masada are however, more readily available and are popular at prices from R445k.
Average family homes are priced from R1.5 million to R2 million and because of the shortage of smaller rental units, such homes are often rented by groups of contractors or engineers on contract at Kusile who return to their families at weekends.
Rentals range from about R8 000 to R17 000 per month, depending on the number of bedrooms.
Groenewald says Bronkhorstspruit's commercial sector is humming thanks to the inflow of workers. The food and entertainment sectors are doing particularly well since a large percentage of tenants are single or live apart from their families during the week.
She says with the Kusile project set to last another five years, two new coal mines opening and more to follow, the local economy is set to benefit for a long time to come, a fact that has not escaped investors in the residential sector.
“And with the latest drop in interest rates, their prospects of good yields have improved considerably.”
Luxury properties around the Bronkhorstspruit dam are selling well at prices ranging from R2 million to R7 million and buyers are not only attracted by the scenic environment, water sports and rural ambience, but also by the central position relative to Pretoria, Johannesburg, the East Rand and the burgeoning town of Witbank.
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