Moving along the N2, 110km east of Cape Town is the town of Caledon.
The town owes its situation to the presence of hot water springs which were the catalyst for the initial growth of the town which was later named after its Governor, the Earl of Caledon.
Caledon is a government service centre, as well as a significant agricultural service centre. The Municipal head offices are located in the town along with the regional offices for the Departments of Education, Social Development and Home Affairs.
Caledon is the centre of a broader agricultural region which produces barley, wheat and wool. Overberg-Agri, which provides services and support to the farming sector, has its head office located in Caledon. It is also home to the Southern Associated Maltsters which is the only malt producer for the South African lager beer industry and is the largest in the southern hemisphere.
While tourism in the town is limited it does have two large tourism attractions: the hot springs and Caledon Casino,. The latter is one of five middle-sized casinos in South Africa. Events include the Caledon Country Fair and various mountain biking events. There is a small tourism association.
In the Growth Potential of Small Towns Study, Caledon is classified an agricultural service centre known for its casino and hot springs. It is regarded as a town with low human needs and medium development potential.
A key challenge in Caledon is the shortage of middle income housing stock. Consequently many of the managers working in the town reside outside the area