With strikes within the mining sector of the industry, how does this affect the property industry and how does this reflect in real terms?
Labour Strikes are a routine occurrence in South African. Sentiments reflected amidst strikes and within mining community property are positive. One aspect which still positively contributes to this “positive” indication is the low interest rate coupled to 100% bonds being granted to first-time home buyers. This amidst the basic cost of living increases and salaries not holding pace with these increases. Banks have relaxed on their deposit requirements and this has assisted buyers in purchasing property.
Statistics show a 6% growth in bond applications compared to the same time last year.
Even though there was growth within the property market, it has relatively slowed down and this factor has contributed the affordability of property across the income spectrum.
This statistic has been realised in mining towns too as there are people that accept transfers or receive sizeable increases. This specific market sector is thus not adversely affected by mining strikes either.
Sentiments have thus shown improvement for first-time home owners as well as within the mining suburb property sector.
Negatives of mining property:
- Where unrest and violence is taking place it is a fact that property value will be affected negatively.
- It is a fact that we would all love to be close to work and this is a problem for property across the spectrum.
- Informal settlements spring up in close proximity to industrial areas which negatively affects the value of commercial and residential property alike.
The mining industry is plagued with strikes and if this is the primary industry supporting a town, province or suburb, then the risk is higher for a sluggish growth on property value.
Positives of mining property:
- The mining industry as a whole will still be around for a while.
- Demand for property will thus still ensure growth within this residential property market.
- There are secondary industries which service both mines and other industries which should promote investment and growth.