After showing exceptional returns on property investments late in 2007, the Makhado (formerly Louis Trichardt) property market has succumbed to the general slowdown gripping the country.
“Although prices in general are coming down, we still have buyers in the over R1m price range, and there’s plenty of stock for them to choose from,” says Gwen Loots, principal of Realty 1 International Property Group in the area in a company media release.
Loots has however found that cheaper properties are those moving at present.
Founded in 1899, Makhado has a lively business environment. According to the local website Makhado Online, there is strong movement amongst the population to fight crime, making the town an attractive option for South Africans looking to move from main centres.
Makhado has enjoyed a steady influx of new staffing for the AFB Makhado Flight Centre since mid-2007, and this has helped boost the residential property market. With the erection of the new Makhado Crossing Shopping Mall, the area is showing positive signs of growth. According to Deeds Office data, 585 freehold properties were sold during 2007 compared with only 312 during 2006, with an increase of just over 11% on the average selling price.
Activity in the sectional title market is much slower however. “The municipality has put a stop to new developments for the next four years – presumably as a result of the power crisis,” says Loots, “but I am always positive. I know this is just a correction and we’ve been through it all before.”
Loots says buyers are taking longer to decide and the asking prices are definitely coming down. “Sellers are now more prepared to negotiate their prices,” she says.
New listings are coming in at a rate of 30 per month. Loots has no rental book but believes that property investors enduring the current downturn will be in a position to score from the demand for rentals that is only just beginning.
Located at the foot of the Soutpansberg Range, Makhado is a prime tourist area but Loots says very few B&Bs are ever listed for sale. There are tremendous tourism opportunities in the area and although there is no new stadium destined for the area, the community can benefit from overflow accommodation from Polokwane fixtures of the 2010 Soccer World Cup for the area.