LIMPOPO – Phalaborwa is experiencing a mixed property market defined by slow sales, shifting demographics, but also a growing interest from investors and first-time buyers. While there are deals being made, the overall activity remains slow.

Tommie Marais, a real estate agent at Jen-Tom Properties, describes the current state of the market as “slow,” adding that although sales are still happening, the pace has significantly decreased over the past year. He notes that the drop in property prices is a clear reflection of this, with many residents having relocated due to work transfers or leaving the town altogether.

Marais attributes much of the slowdown to the local municipality. “The inadequate municipality plays a big role in the property market. People are negative about the municipality due to the very poor condition of our town,” he said.

Due to these concerns, investors and buyers are less likely to commit to long-term property decisions in the area.

Despite these challenges, the market is far from inactive.

According to Marais, the bulk of current buyers are made up of investors and first-time homeowners. He also said that the market is currently balanced.

“It is 50/50,” he says, meaning that neither buyers nor sellers have a clear upper hand.

One area that remains particularly vibrant is the rental market. Rental properties are in high demand, driven largely by workers from the mining sector, visiting professionals, and a small but steady population of new arrivals looking for short- or medium-term accommodation.

The town’s tourism economy also plays a crucial role in sustaining property demand.

Deloris Daniels and Siceron Vundla, principal property practitioners at Keatrel Real Estate, highlight Phalaborwa’s unique position as a major gateway to the Kruger National Park. Each year, the town attracts thousands of international and local tourists, creating consistent demand for short-term holiday accommodations such as guesthouses, bed and breakfasts, and safari lodges.

Commercial real estate is another area poised for growth. Daniels and Vundla point to a steady increase in tourist foot traffic and a demand for modern, convenient lodging and retail space near the central business district (CBD). Properties located close to the Phalaborwa Gate of the Kruger Park, Palabora Mining Company, and Foskor are especially attractive to investors, as they offer a blend of accessibility, infrastructure, and tourism appeal.

Phalaborwa’s housing market is also varied in its offerings. The Keatrel property practitioners note that roughly 90% of properties are freehold or full title, including traditional homes and houses in residential estates.

Meanwhile, sectional title units such as townhouses and flats make up about 8% of the market.

They further indicated that data from the South African Deeds Office confirms that the most active section of the market consists of mid-career buyers.

Over the past six months, individuals aged between 36 and 49 have dominated property transfers with 58%, showing a clear preference for long-term investment, family living, and entrepreneurial opportunities. Young buyers aged 18 to 35 represent 22% of recent transactions, drawn in by the town’s affordability and lifestyle, while pre-retirees (aged 50 to 64) and retirees (65 and older) make up 11% and 9% of buyers.

“Phalaborwa’s consistent property demand is fueled by economic, lifestyle, and tourism factors, making it a strategic location for both residential and commercial property buyers,” the practitioners concluded.

Tzaneen

Meanwhile, the current high prime lending rate of 11.25% is having a noticeable impact on the property market in Tzaneen, Letsitele, and Modjadjiskloof.

According to property expert Wicus van Vuuren of Aïda Properties and Van Vuuren Attorneys, the market has cooled significantly compared to the post-Covid-19 boom.

Between 2020 and 2022, during and just after the pandemic, the prime lending rate was around 7%. That created a surge in demand, especially from first-time homebuyers,” Van Vuuren explained.

“But since mid-2023, as interest rates climbed, the property market has slowed down.”

Van Vuuren believes that a drop in the prime lending rate to between 9% and 10% could help revive the market. He also pointed out that several other economic pressures are making it harder for people to invest in property.

“Household disposable income is shrinking as the cost of living continues to rise; school fees, medical aid, fuel, car payments, and food are all becoming more expensive. In this environment, it’s not financially viable for most first-time buyers to commit to mortgage bonds of R20 000 to R30 000 per month,” he said.

However, Van Vuuren noted some positive signs for Tzaneen’s economy. “We’re seeing new residents move into the area for work opportunities, which is encouraging.”

Another factor slowing the market is overpriced properties. “Sellers often list homes above market value in hopes of making a profit or recovering past purchase costs,” Van Vuuren said. “But in the current economic climate, buyers are cautious and less likely to overpay.”

Mahlatse Sape, a candidate property practitioner at RE/MAX, echoed these concerns. “Although the market is slower, Tzaneen remains a great location for investors, particularly in the rental space,” she said. However, she added that it is becoming increasingly difficult for potential tenants to qualify for rental properties due to strict credit checks.

“The lending rate is especially challenging for buyers looking at properties valued from R2 million and up; most can’t qualify for a bond unless they’re paying in cash,” she explained.

Interestingly, Sape pointed to a trend among young professionals from townships and villages, who are choosing to build large, modern homes in rural areas. “In areas like Rwanda (N’wamitwa), Vivian, and Burgersdorp near Ofcolaco, more young people are building their dream homes. It’s often more affordable than buying in the suburbs,” she said.

One of the key motivations for building in rural areas, especially among young black professionals, is financial security. “They believe that even if they lose their income, the bank won’t repossess homes in rural areas because such properties are not considered formal investments,” Sape added.