Land for development use is a much sought commodity in the coal mining town of Middelburg in Mpumalanga.

"Speculators who previously purchased houses and clusters initially to let - then later place them back on the market at approximately 30 percent higher prices - are now turning to developing land for residential purposes," says Martin van Zyl, Pam Golding Properties' area principal.

"Such is the demand, that a 40 hectare piece of land situated just outside the town recently received three offers between R8,4 million and R10,6 million, with the seller holding out each time for an even higher price, despite the fact that each was the full asking price at the time. Another site, an eight hectare piece of land in town, recently fetched R6,5 million. Unheard of outside the cities, such prices are indicative of the strong demand in Middelburg for land for development," says

He adds that there is considerable activity in the higher price bracket of the residential property market. This area has a strong top end market, with most of the demand fuelled by key players in the mining industry, as well as those who have achieved success in agriculture, given that Middelburg is considered one of the best areas in the country for maize and cattle farming.

"Mining always has had a significant impact on Middelburg, with the majority of businesses existing directly or indirectly because of the numerous mines in the vicinity.

New open cast coal mines are popping up virtually every month, which has major benefits not only for the local economy, but with unexpected indirect benefits too. Some farmers have benefited substantially as a result of this phenomenon, with a notable instance of a farmer whose land - which while being worth in the region of R5000 per hectare from an agricultural standpoint, which was purchased for mining purposes at R22 000 per hectare. In fact, there are even instances of mines paying up to R60 000 per hectare for such land.

"While this creates problems when marketing land for agricultural use - given the disparity in price between mining and agricultural usage - we are fortunate in Middelburg in the sense that we literally have farms of all kind around us. Some of the largest maize farms in the country are situated on the highveld, and these often double up as cattle farms. Because of their profitability, such farms rarely come onto the open market as they are usually snapped up by one of the other prominent farmers in the area," he says.

To the north of Middelburg, PGP is active in the strongly agricultural Groblersdal area, where crops include citrus, grapes, tobacco, cotton, wheat, soya beans, sunflowers etc.

"The Olifants River runs through this area and on the river there are numerous small farms of about 100 hectares, which are very popular, generally changing hands for approximately R1,5m. We are also marketing game farms, and recently sold a 311 hectare game farm for R7,3 million," says van Zyl.

Commenting on the Middelburg housing market in general, he says in line with the rest of the country, this has slowed somewhat in recent months. "However, we are currently experiencing an exceptionally strong demand for homes priced between R400k and R650k. As mentioned, developers are active in the area and we currently have a number of new cluster and town houses on the market in the price range from R780k to R1,1m. While these are upmarket homes, the prices are impacted by stand prices in the area, with a 1200sqm stand easily fetching R500 000 in the better areas of Middelburg, a factor which considerably boosts the price of a newly built unit.

"We have recently begun experiencing increased movement from the local township into town, but unfortunately this trend slowed as the supply of properties in the R400 000 to R600 000 dried up. If we had more properties in that price range, the move would continue. While the local township has shown some activity, it is regrettable that banks are not finding true value in township homes, and although we had willing sellers/willing buyers for homes priced between R280 000 and R400 000, these transactions could not go through. Homeowners are understandably not willing to sell at prices which are not market related or realistic," concludes van Zyl.

For more information contact 013 243 0616 or send an email.

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