Housing a priority in North West as population grows ahead of national average

North West Province is one of just three provinces in South Africa – along with economic powerhouses Gauteng and Western Cape – where population growth exceeded the national average over the last 11 years.

Although North West is widely known for its natural beauty, cultural heritage and diverse mining sector, its emergence as a destination for inward migration might come as a surprise to some – yet the graph below shows that North West’s appeal is greater than six other provinces, five of whom are growing at less than the national average.

Population growth 2011 - 2022

There are 4.2 million people living in North West in 1.3 million households spread across 18 municipalities and 48 towns. The urban areas are home to 53% of the province’s population, housed in 90% of the province’s formal properties. The remaining 47% live in the non-urban areas, where only 10% of the province’s formal properties can be found.

The four biggest municipalities (consisting of the towns and non-urban areas within their boundaries) account for half of the province’s population.

A growing population has an appetite for housing, and so Lightstone has taken a look at the numbers behind the name to understand why population numbers in the Platinum province are rising ahead of the national average, and how the housing market is faring.

Apart from population growth, there are four key drivers of the province’s housing market:

• Proximity to SA’s economic hub in Gauteng
  The North West has attracted residents and businesses wanting to escape the urban hustle and bustle of Gauteng but maintain easy access to the commercial centres of Pretoria, Midrand and Johannesburg. Residential homes around Hartbeespoort Dam are within Gauteng’s commuter belt.
• The region’s tourism industry
  Popular destinations include Pilanesberg National Park and Sun City Resort – this has spurred the development of various accommodation options, such as guesthouses, bed and breakfast establishments and Airbnb rentals, which have, in turn, boosted the residential property market.
• Mining
  Generates more than 50% of the province’s GDP and employs a quarter of its workforce: gold is mined at Orkney and Klerksdorp, platinum at Rustenburg and Brits; uranium at Klerksdorp; and diamonds at Lichtenburg, Christiana and Bloemhof. North West mining ventures make up 20% of South Africa’s mining industry, while more than 90% of the country’s platinum comes from the province’s mines.
• Government’s housing policy
  North West has benefited from government policies aimed at addressing the country’s housing shortage.

A snapshot of towns in the province reveals:

Entry level housing

The numbers tell a story of housing challenges against a backdrop of a rising population: around 72% of households live in informal dwellings, while 28% live in formally registered homes.

Only 35% of deeds registered properties are valued at more than R500k against a national average of around 50%, and only 15% are valued at more than R1m against a national average of 30%.

There are approximately 350 000 registered title deeds in the province, the third least in the country. The bulk (approximately 190 000) of the provinces formally registered properties are in the Affordable category, followed by Mid Value (just under 120 000), High Value (almost 40 000) and Luxury (7 000) (see graph below).

North West: properties by value band

During 2022 ownership at the lower end of the market received a boost, with 2 500 properties in Orkney transferred from the local municipality to individuals. Similar transactions took place in Wolmaransstad (500), Klerksdorp (400), Potchefstroom (160), and Ottosdal (150).

In some cases, non-urban areas have developed outside a town’s borders, and sometimes they are upmarket estate developments, sometimes poor rural communities or informal housing.

Three biggest towns (formal properties)

The largest three towns in North West in terms of properties formally registered at the Deeds Office are Klerksdorp, Potchefstroom and Rustenberg, and they account for a third of the province’s properties – but just 15% of the province’s population.

Of the three, Rustenberg has more properties of higher value – just over 30% are valued at more than R1m, compared to just over 20% in Potchefstroom and slightly more than 10% in Klerksdorp.

Conversely, properties of unknown value account for 50% of stock in Klerksdorp, and just over 10% in Rustenberg. More often than not these unknown value properties are located in the lower value areas.

Klerksdorp, Potchefstroom, Rustenburg - property values

Where are the deals being done?

Most property sales (as opposed to transfers from municipalities) took place in Rustenburg and surrounding non-urban areas (1 800), Potchefstroom (1 215), Hartebeespoort/Brits and surrounding areas (1 260) and Klerksdorp (800), as at January 2022 to date.

The most valuable properties

The total property value in Klerksdorp, Potchefstroom, Rustenburg, and Orkney account for 43% of North-West’s combined property value. The province’s highest average property values are found in Kosmos and Hartebeespoort, where the average property value is R2.4 million. More than half of the houses in these towns, situated on the edge of the Hartebeespoort Dam, are valued at above R2m, compared to the province average of 4%.

Spread of R2m and higher valued properties

There are 235 Estates in the province with 32 000 residential units. There are 57 ‘luxury estates’ (where the average value exceeds R2m) in the province with more than 10 properties per estate. Luxury estates account for 11 500 properties. The highest value estates, with an average value of more than R3m are: