A wave of new residents and a strong contingent of cash buyers are boosting the residential property market in Bethlehem in the eastern Free State.
This is according to Marna Erasmus of the local RealNet franchise, who says job opportunities in enterprises serving the strong agricultural sector as well as in new retail enterprises such as the new local shopping mall, currently in phase two of development have drawn many new residents.
A total of 22 homes priced between R640 000 and R1.46 million as well as four commercial properties priced between R2.5 million and R3.75 million were recently sold. Several stands and homes were also sold in nearby Paul Roux, where prices are still affordable.
She says roughly 30% of buyers are newcomers to the town employed in agriculture or related support industries. They typically earn good basic salaries that enable them to qualify for home loans - sometimes up to 100% of the purchase price - and they typically target comfortable family homes priced at up to R1.3 million.
Erasmus says the agricultural sector is a main player in the town's economy and farmers are currently also active buyers of second homes in the town. The reason is that boarding facilities at the excellent local schools are insufficient and farmers club together with friends and neighbours to buy houses where their wives and children stay during the week.
“Many farmers are well-established and tend to buy for cash, which has contributed to our strong cash market that climbed to nearly 40% in the past year."
She says the strong demand for homes has, however, put pressure on rental stock, and this has led to rental escalations. Modest older homes in areas such as Môrelig currently achieve monthly rentals of between R5 000 and R5 500, while larger homes with four bedrooms and two bathrooms achieve rentals of between R7 500 and R8 000. Modern homes with upmarket finishes are rented out at up to R10 000 per month.
"We expect the upward curve in prices to continue this year, since demand for rental units and properties for sale far outstrips supply.”
They also expect that the price segment from R640 000 to R1.5 million will remain robust since banks are still granting 100% home loans to qualified buyers in this price category, says Erasmus.
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