Umhlanga just pips Lephalale

Rural Limpopo has only just been beaten by a seaside holiday spot in a new survey of average rental rates.

A shortage of suitable property in Lephalale and Musina is pushing up prices, according to PayProp's quarterly rental index.

"In many of the smaller towns with large industrial developments nearby we see an uptick in the rental prices," PayProp CEO Louw Liebenberg said yesterday.

Lephalale was in the top spot the previous quarter, reaping the benefits of a massive influx of contractors during the construction phase of the Medupi power station.

The town, formerly known as Ellisras, was however overtaken by Umhlanga Rocks in the quarter to end June. Border town Musina has the third-highest average rental prices.

Growth rates in the Northern Cape are also still high, with the area recording year-on-year growth of above 10% for the past eight months.

This was largely driven by established towns such as Kuruman, which are closest to remote mining operations.

Liebenberg said limited supply was driving the uptick in average rental rates more than underlying economic factors.

"The year-on-year growth rate has, for the first time in over 18 months, exceeded the 7% level, to a current high of 7.82%."

The highest growth rate recorded was 13.7% in July 2010, during the Fifa World Cup.

While as many as one in four homeowners were buy-to-let in 2000, one in 12 are doing that now.

Owners are in a position to ask for slightly more because of the tight supply, said Liebenberg.