RE/MAX Suburb Trend Report – Phalaborwa

Area history

The town of Phalaborwa in the Mopani District Municipality of the Limpopo Province is located at the convergence of the Ga-Selati River and the Olifants River, around the halfway mark along the eastern border of the Kruger National Park. The town received its name from the Sotho tribes that moved into the area from the south. The name Ba-Phalaborwa, which is what the tribes called the area, means ‘better than the south’ because they believed the area to be a far better place to settle. The Sotho tribe mined and smelted both copper and iron ore in the area as far back as 400 AD, a tradition that was carried on by the Palabora Mining Company and still very much a part of the town. The massive open cast mine in Phalaborwa is Africa’s widest man-made hole at almost 2000 meters wide.

Known to some as the Valley of the Olifants, Phalaborwa is a popular tourist and wildlife destination as it is the only South African town that shares a border with the Kruger National Park.  There are also a number of natural attractions in the vicinity such as the Blyde River Canyon, the Rondavels, God’s Window and Bourke Luck’s Potholes.

 Area property information

Adrian Goslett, CEO of RE/MAX of Southern Africa says that the property market in Phalaborwa has been dominated by consumers under the age of 49 years old. In fact, he notes that greatest number of recent buyers have been from the 18 to 35 year old age group, who account for around 42% of all buyers the area. Consumers from the 36 to 49 year old age group account for about 41% of the recent buyers. This demographic also accounts for 42% of existing homeowners in the area and approximately 35% of the recent sellers.

Goslett says that property sales peaked in the area during 2005 with 547 homes sold in that year. He notes that from 2005 to 2009 the number of property sales transactions dropped dramatically reaching a low of 89 in 2009. Figures improved in 2010 and stabilised up to 2012 with around 146 properties selling each year.

According to Lightstone, property in Phalaborwa consists largely of freestanding homes (91.28%), with the remaining 8.72% sectional title homes. Goslett says that from 2004 up to 2008, property prices in the area showed strong and steady growth. However, in 2009 prices dipped, dropping again in 2010 with the average freestanding home costing around R610 000 and a sectional title unit priced at R302 000. In 2011 market improved and prices showed recovery. Prices continued on their upward trend with the current price of a freestanding home around R729 000 and a sectional title unit around R362 000.

Property price trends

Demand for property

According to Goslett the most popular properties sold in the area between June 2012 and May 2013 were those priced between R400 000 and R800 000. These properties accounted for over 57.2% of the properties sold in the area during that time. Properties that fell within the R1.5 million to R3 million category represented 23.9% of the market, those below R400 000 represented 15.1%, and properties priced between R1.5 million and R3 million accounted for just 3.1%. Properties priced above R3 million represented only 0.6% of the sales between June 2012 and May 2013.

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