Areas and Places Research

Data shows urbanisation drives increased households in top ten non-metros

The road to Potchefstroom.
The road to Potchefstroom.

While some of South Africa’s top ten non-metros have experienced sluggish property price performances recently, others – most notably Middelburg in Mpumalanga – have grown.

Hayley Ivins-Downes, Head of Digital at Lightstone Property, says cities, non-metros and smaller towns are experiencing different challenges: “Our information indicates that smaller towns are benefitting as they attract new property owners who can work remotely, while most cities are grappling with failing businesses and rising unemployment.”

All the non-metros share certain characteristics to a greater or lesser extent – growing populations, dominated by lower income levels with a pressing need for formal housing to replace informal settlements, improved service delivery, investment, and job creation.

Lightstone’s ‘Towns Characterisation’ draws on various levels of location intelligence developed over time to provide a general view of towns in South Africa. The information examines the overall health of the ten largest non-metro towns by number of households:

  • Pietermaritzburg (KZN)
  • Emalahleni (Mpumalanga)
  • Klerksdorp (North West Province)
  • Mmabatho (North West Province)
  • Botshabelo (Free State)
  • Potchefstroom (North West Province)
  • Rustenburg (North West Province)
  • Mdantsane (Eastern Cape)
  • Middelburg (Mpumalanga)

These towns present opportunity for people to enter and move up the property ladder, economic circumstances permitting. Most people (89% nationally) live in low-income areas where household income is below R22 000 per month.

Polokwane has the ‘least poor’ (70% earn below the threshold) while Mdantsane and Botshabelo are categorized as only having lower-income areas. The poor are the ‘poorest’ in Botshabelo and ‘least poor’ in Rustenburg while the wealthy are ‘wealthiest’ in Rustenburg and ‘poorest’ in Klerksdorp.

In comparison, average household incomes in the major cities are between 10% and 30% higher in Johannesburg, Pretoria, Cape Town, and Sandton, while Durban is much closer to the average incomes recorded in the higher non-metro towns.

Data concerning household growth shows that the towns range in size from 50 000 to 150 000 households, and they have all grown in the period from 2011 to 2019. Data from Statista demonstrates the upward urbanisation trend in South Africa over the last few years. This trend will continue as South Africans move to metropolitan areas in search of better work and lifestyle opportunities.

The increase in households in most urban centres will continue for the foreseeable future. Of Lightstone’s top ten, Potchefstroom, Middelburg, Klerksdorp and Emalahleni are growing strongly in percentage terms. The townships of Botshabelo and Mdantsane grew slowly in the 2000s but have recorded ‘high’ (>9.5%) and ‘mid’ (<3.5%) level growth respectively over the past decade.

In review, freehold property values are highest in towns with high household incomes such as Rustenburg and Polokwane. Middelburg has the highest average value for Sectional Title living units. Average freehold prices in Rustenburg are around R1.1 million and around R1 million in Polokwane, compared to approximately R1.8 million in Johannesburg and Cape Town, and more than R3.5 million in Sandton.

On closer examination, changes in property prices over the past five years have showcased dramatic differences. Property prices in Botshabelo have bottomed out while there has been modest growth in Mdantsane, Polokwane, Rustenburg and Emalahleni” comments Ivins-Downes.

Freehold property prices have soared by 84% in Middelburg (25% Sectional Title growth) over the past five years as the town has become a large industrial and agricultural centre, with a state hospital, clinic, a private hospital, and several state schools. The municipality expects the town’s population to reach 500 000 by 2030.

Lightstone’s data shows that rising numbers are indicative of the challenges and opportunities facing most urban centres in South Africa,” says Ivins-Downes. “The Klerksdorp market has dropped significantly in the last two years after being active and so still records property price growth of 42% (Freehold) and 35% (Sectional Title) over the past five years. Other strong performers include Mmabatho and Potchefstroom. The lower numbers for most towns suggest tougher economic conditions taking a toll on the market, and the post Covid-19 stimulus from government should determine, to an extent, on how these and other towns respond in the next five years.”

Polokwane has seen the highest short and long-term increase in new, formal (deeds registered) properties, followed by Klerksdorp and Emalahleni. There were few new properties developed in Rustenburg over the last ten years compared to other towns but there has been an uptick in activity in the last two years.

Rustenburg’s economy has traditionally been dependent on mining, with finance and retail considered to be less important. In the mid-2000s the Rustenburg Local Municipality formulated the Rustenburg Vision 2040, and its goals include improving public safety, improving resource management, and a reduction in the town’s dependency on mining, part of this strategy included rejuvenation of the CBD.

There are enough households to accommodate 60% of the reported population of the towns, other than Pietermaritzburg, where the number is slightly less, which suggests around 40% of people live in informal settlements or in accommodation on existing household properties. This is an indication of the scale of the house building opportunity. The graph demonstrates the fluctuating fortunes of the ten towns in terms of new property development.

Although Pietermaritzburg is second in terms of its number of VAT registered businesses, its population is significantly higher than the other towns in the top ten. This suggests fewer work opportunities in a town which has become known for poor service delivery, a decaying infrastructure, and a municipality that has been placed under administration twice. Another consideration is that Pietermaritzburg has suffered from the decline of textile, clothing, and footwear production because these industries have been moved to Asia, to lower production costs.

However, there are some positive aspects of the data, major investments since 2002 include the Liberty Midlands Mall (the area’s largest shopping centre by gross lettable area) and the Stay Easy hotel. Hulett’s Aluminium and Willowton Cooking Oil also contributes to a substantial part of the region’s industrial output.

Mmabatho, Botshabelo and Mdantsane have the fewest registered VAT businesses, although in each of the towns there are large and well-established informal economies which provide both employment and services.

73% of businesses in Botshabelo are classified as start-ups as they have been operating for less than three years. Mmabatho is next in line at 51% and is followed by Mdantsane at just less than 48% – so encouragingly, the areas with fewest VAT businesses have the most start-ups.

Conversely, Polokwane has the least number of start-ups (28%) but more VAT registered businesses than any of the top ten.

In terms of investment opportunities, Pietermaritzburg and Polokwane have received notable commercial property related investment in the last two years, although these numbers have fluctuated.  Investment in Emalahleni has dropped substantially, perhaps a reflection of difficulties in the mining sector, while there has been little or no activity in Mmabatho, Botshabelo, Potchefstroom and Middelburg. The relative lack of investment activity is reflected in the poor socio-economic conditions in terms of low-income levels and high numbers of people who live in informal settlements, all of which is being exacerbated by rising populations.

The retail industry in the top ten towns is sufficient when chain presence is viewed against population size. Rustenburg and Polokwane are comparatively saturated and any new chain stores will have to fight for share from a well serviced town. Pietermaritzburg, Rustenburg, and Polokwane have a more upmarket feel to their grocery offerings than the other towns – which is largely aligned to the population incomes available to the brands, these towns also, correspondingly, have more mall area.

A snapshot of the top three towns:


  • 141 000 households and 500 000 population.
  • Normal average household income levels in poorer areas and high household income in wealthier areas.
  • Lower average Freehold property prices but high Sectional Title prices, both of which have been on the rise and drive moderate and stable churn.
  • Higher incomes drive it to have the most mall space and a higher number of upper than lower end grocery chains.
  • Businesses are generally established with 37% being start-ups. There has been good investment and growth in new properties, but this appears to be slowing.


  • 98 000 households and 350 000 population.
  • Average household income levels in poorer areas are high compared to the other towns but in the wealthier areas the average income is lower.
  • Moderate average Freehold property prices which have been dropping and low Sectional Title prices, the market shows average but stable activity.
  • Higher incomes drive it to have lots of mall space, but the offerings are more evenly split between high and low end as compared to Pietermaritzburg.
  • Businesses are generally less well established with 43% being start-ups, while there is a good number of new properties being added, commercial property growth has fallen substantially in the last two years.


  • 68 000 households and 230 000 population.
  • Average household income levels in poorer areas are on the lower end (R1000 less than Pietermaritzburg) and wealthier areas are low compared to the other towns.
  • Moderately low average freehold property prices and extremely low Sectional Title prices. However, both have escalated substantially over the last five years. Moderately low activity in the market which has fallen greatly from the activity levels of four years ago.
  • Low incomes drive it to have no major malls and more lower end than higher end grocery options.
  • Businesses are generally well established with 31% being start-ups. While there is a good number of new properties being added, it has again dropped off substantially from 4 years ago. Commercial property growth has also fallen in the last two years.