The implementation of minimum wage levels and social grants are boosting the economies of rural towns, with benefits for their commercial property markets.

And this trend is clearly evident in North West province, where demand for retail space is at a premium, says Marietjie Oelofse of the new Aida Lichtenburg office.

"This is in stark contrast to the situation five years ago, when many retail shops in town centres stood empty. But minimum wage payments and better distribution of social grants have increased disposable income, creating a demand especially for clothes and furniture.

"As a result, there is strong demand for space from retailers catering to this growing buying power."

Aida National Franchises' CEO Jan Davel says the growth in rural economies is also reflected in the number of new Aida franchises opening in small towns, which were traditionally served by one-man property operations. "We are seeing a tremendous growth in applications for franchises in small rural towns around the country."

The Lichtenburg office, which opened in December last year, also serves the markets in surrounding towns. It is owned by Oelofse, who acts as office manager, and Robert Jonker, who operated a small local agency for several years and has solid experience in the local property market.

Oelofse says the upcoming middle class is, at the same time, stimulating the residential property market in small North West towns. "Many buyers who traditionally lived in townships are now qualifying for home loans and moving to suburban residential areas."

Entry-level properties in the area offer excellent value at prices starting from about R120 000. "At this price, you can still buy a basic three-bedroom house with single facilities and needing a bit of renovation on a large suburban stand.

"However, the best investment properties are those in established areas of the townships. Many of these properties are sold privately at prices as low as R20 000. With building costs now at around R3000/sqm, they are greatly undervalued since building an equivalent home would today cost R120 000 to R180 000," she says.

"In addition, many of these homes have been upgraded through the years. They are thus great buys for new entrants or buy-to-let investors." Oelofse says most homes in bigger towns in the area such as Lichtenburg and Mmabatho are priced at around R750 000, while luxury homes cost in the region of R1,5m.

For more information contact 012 682 9600.

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