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Buy-to-let investors target Lydenburg homes

Investors in the buy-to-let market are now active in Lydenburg in response to the rising demand for rental accommodation.
 

Harcourst Lydenburg is sellinng three-bedroom, tow-bathroom townhouses in this complex close to shops and schools at prices from R710 000 to R780 000

Pieter Minnaar, principal of the Harcourts agency in the scenic Mpumalanga town at the foot of the Long Tom Pass, says almost 40 mines are currently in operation around Lydenburg, and that mine employees make up two-thirds of local tenants.
 
"Mining is a risky industry and hugely dependent on economic conditions. Consequently, shafts open and close according to market demands, with a concomitant ebb and flow in employee numbers. This results in a fast turnover of mining tenants and keeps the local rental market very buoyant," he says.
 
And this lively market is attractive to buy-to-let investors, who are currently targeting properties in the lower price ranges. Fixer-uppers are popular, but most stock in this sector has now been taken up and renovated, Minnaar says.
 
“However, two- and three-bedroom homes in security complexes that sell for R600 000 to R1m now readily find tenants at rentals of R6000 to R12 000 a month.”
 
Minnaar says that on the whole, the market is significantly more active than a year ago and that the town is also attracting increasing numbers of buyers who work in outlying areas. "Those who work in surrounding towns such as Steelpoort settle their families in Lydenburg because of its schools and shopping and medical facilities. Many such buyers are prepared to commute daily to their workplaces up to 80km away."
 
Home prices in Lydenburg start at around R600 000 for smaller sectional title units, while full-title properties generally sell for between R1,2m and R1,4m.
 
Two new town extensions - The Heads and Sterkspruit - have been established on the eastern and western sides of Lydenburg thanks to the growing demand for housing, and although stands of between 600 and 800sqm in these areas are much smaller than those in the older parts of town, home prices are on a par with older properties.
 
Minnaar adds, though, that financing remains a challenge for local buyers, with about half the applications made for home loans being declined by the banks.

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