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Cullinan offers good value property

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03 Sep 2012

Competitive prices are attracting buyers to lifestyle and agricultural property holdings around Cullinan and Rayton.

This four bedroom house is located in a quiet bushveld area. There is a granny flat, pool plus ten horse stables. It is on the market for R2.2 million - click here to view.

Joop Coetzee, owner of the RealNet Plotte & Plase Noord franchise, says holdings of about 8.5ha with a home sell at prices from R1.7 million, while larger holdings of 40ha with a home sell at prices from as little as R2.6 million.

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 says.

Coetzee says that sales of improved land at prices between R1.5 million and R3 million have picked up across his whole franchise area.

The area covers agricultural land from Pretoria's Bronberg to Bela-Bela and from Hans Strydom Avenue to the Bronkhorstspruit border.

The demand for larger units has also increased this year.

This 21ha farm has a four bedroom house and flat. It is located near Cullinan and is on the market for R1.6 million - click here to view.

"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, 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 close to R550 000. Coetzee says, however, that while there is demand for this type of property, sales are hampered by problems of financing.

He says 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 they have seen differences of up to 30% between bank valuations and valuations by private concerns, Coetzee says.

He says that 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, sellers are prepared to carry the risks themselves and take over the function of banks," he says.

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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