Cullinan holdings offer good value

Lifestyle and agricultural holdings around Cullinan and Rayton are attracting buyers thanks to competitive prices.

Joop Coetzee, owner of the RealNet Plotte & Plase Noord franchise, says holdings of about 8,5ha with a home sell at prices from R1,7m, while larger holdings of 40ha with a home sell at prices from as little as R2,6m.

Prices of units farther away from the villages are lower, which acts as a double incentive for buyers who target rural properties because of the quiet lifestyle they represent, he says. "Buyers between the ages of 25 and 50 are particularly active in this market and while many of them are lifestyle buyers, some plan to use their holdings for small agricultural enterprises."

He reports, however, that sales of improved land at prices between R1,5m and R3m have picked up across his whole franchise area, which covers agricultural land from Pretoria's Bronberg to Bela-Bela and from Hans Strydom Avenue to the Bronkhorstspruit border, while demand for larger units has also increased this year.

"There is now stronger demand for land parcels of 100ha to 150ha and most buyers in this sector plan to farm with game or irrigation," he says.

Most units in the franchise area range between 4,2ha and 8,5ha, he says, although some units of up to 700ha are available, which are large enough for game or extensive cattle farming.

The cheapest properties are unimproved plots, with prices starting at around R550 000. Coetzee says however that while there is demand for this type of property, sales are hampered by problems of financing. "Lending institutions require deposits of at least 40% to finance undeveloped land and not many buyers can come up with the cash and still have the resources to improve the property."

He adds that sellers are also experiencing problems with bank valuations of their properties when prospective buyers apply for financing. "Banks are valuing units at below the real market value and we have indeed seen differences of up to 30% between bank valuations and valuations by private concerns. In some cases, banks relent if applications at the higher value are supported by professional independent valuations, but there is no question that this practice currently suppresses the market."

To overcome this obstacle, some sellers are now offering buyers the option of paying off the property on terms at competitive interest rates. "In effect," says Coetzee, "sellers are prepared to carry the risks themselves and take over the function of banks."

Cash buyers are also making an appearance and Coetzee says that in about 10% of transactions, buyers put cash on the table.

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