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Extremes doing well in Upington

30 Jan 2008
Upington, the principal town and business district of the Northern Region, has expanded from a largely agricultural and tourist base to include national service brands.

And if the go-ahead is given for a proposed R33m upgrade of the Upington Airport, the town's growing economy, which includes a thriving retail and services sector, could be in for a boom.

Realty 1 IPG Upington franchise owner Neels Heydenreich says the expansion of the airport will enhance an already good transport infrastructure and is just one of a number of growth points in the locale.

From a residential sales perspective, he has identified strongest demand from the extremes of the market: at entry-level and at the luxury end.

Driving activity in the R500k price range are emergent buyers whose jobs within the government and informal sectors are enabling them to embrace home ownership. At the opposite end, in the R1,5m-plus price range, take-up of luxury homes has strengthened in the last six months, driven largely by older buyers relocating from the major cities. Many of these purchasers, who tend to have high levels of affordability, are not only looking for new lifestyles, but are also bringing new businesses to the area.

The entry-level market, which he estimates comprises around 60% previously disadvantaged buyers, needs combined earnings of approximately R20k a month to be able to afford a three- bedroom, single-garage house that just a few years ago sold for R100k. While high for the area, which has posted property price growth in excess of 30% in the last year, it is still substantially lower than the affordability requirements for similar homes in other parts of the country, he says.

Middle-market activity is unexciting at the moment and homes are taking two months or more to sell, he continues. However, putting this price range at R700k to R950k, Heydenreich says there is still movement and that it is coming in part from young families returning to their childhood home after years in the big cities. Some are bringing with them new enterprises while others are taking over businesses from their parents.

The most sought-after suburbs by these buyers include Blydeville, Middelpos and the newer part of Keidebees, where he says the number of houses has swelled from four or five in the early 2000s to around 150 today.

Unlike many other growing towns throughout the country, Upington still has reasonable stocks of vacant land, notes Heydenreich.

Currently selling for an average of R150k per 900sq m stand, its availability is ensuring continued activity for the local building industry. A speculative builder himself, he says costs per square metre run to between R2,500 and R3k, which is low when compared with the country's central hubs. By not spending heavily on finishes, however, he is building solid two-bedroom houses with double garages for R550k, which is accommodating entry-level affordability.

He adds there is also visible interest in agricultural property sales, as people see the potential to tap into Upington's thriving grape industry which exports an estimated 1m tons annually. It will accordingly be one of the major beneficiaries of the expanded airport, he says, along with the mutton sector which is also showing good growth.

Those wanting to farm seriously can expect to pay around R75k per hectare for an economically viable grape farm and R1k per hectare for a viable livestock enterprise.

For more information contact Neels Heydenreich on 083 462 0848 or click here to visit the website.

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