Gold price boosts Welkom property market

The gold price is flying along above $500 an ounce - and it's all good for the property market in the Free State mining town of Welkom.

Says Andre Van Eck of Homenet Welkom: "Our property market is very sensitive to the gold price for obvious reasons and that dependency has counted against us for much of this year.

"It has been essentially a buyers' market, due largely to further retrenchments from the gold mines. However, the situation has changed virtually overnight with the gold price reaching $500 an ounce and this opens the door to opportunities for those with foresight and a little courage."

Right now, he says, the best of these opportunities are for 'buy-to-let' investors aiming at the student market (Vista University is based in the town) and for retirees.

With regard to the latter, Welkom is attractive because it has a well-developed infrastructure and a good climate - as well as extremely competitive home prices. "For example a two bed-room townhouse in a modern security complex can be obtained for R150 000 compared with say, R500 000 to R600 000 in one of the bigger centres.

"Similarly, a two-bedroomed flat will cost you somewhere between R110 000 and about R200 000 in Welkom, while freehold three bedroom homes are still available here from around R150 000.

"But of course properties at these prices are bound to be purchased quickly, especially if the gold price holds at around current levels, and that suggests there are also genuine opportunities for developers in Welkom. Indeed, as a measure of my confidence in this market I am currently personally investing in a 12-unit townhouse development."

Article by: MyProperty