Newspaper Article 1993 – Valuer: Some orchards worth half 1992 prices

Valuer: Some orchards worth half 1992 prices

Some Hawke’s Bay orchards have halved in value since prices paid for them peaked in late 1992, according to valuation firm Logan Stone

Logan Stone partner Gerard Logan, speaking at Friday’s Hawke’s Bay Chamber of Commerce rural conference, said the market for orchards growing out-of-favour Red Delicious and Granny Smith varieties had dropped 40-50 per cent from peak 1992 prices to $30,000 a hectare for land and trees.

Orchards stocked with preferred varieties had suffered less. At $50,000 a hectare, prices for them were 20-25 per cent below 1992 levels.

The pastoral farm market was in a state of inertia and sales had fallen to low levels compared with 1993, he said.

“Our observation is that the market has now peaked and demand has cooled considerably,” he said.

Prices achieved for pastoral farms continued to be unrelated to return on investment, reflecting a high lifestyle component.

Closure of the Weddel Tomoana meat works would have limited impact on pastoral property values, despite the consequent reduction in competition for livestock.

Mr Logan said vineyard values had lifted significantly over the past 12 months, reflecting interest from both new entrants and wineries seeking future supply. Vineyards planted in premium varieties had lifted from $35,000 to $40,000 a hectare (land and vines) to between $50,000 and $55,000 a hectare.

They were now on a par with pipfruit orchards, he said.

Bare land for vineyard establishment was sought after and Ngatarawa land sold now for up to $18,000 a hectare. In 1989 blocks in the same area sold for $5000 to $7000 a hectare.

Demand for bare land on both the Heretaunga Plains – and nearby surrounding land remained high because of competition from pipfruit, stonefruit, process cropping and lifestyle interests. Land on the Heretaunga Plains ranged in value now from $20,000 to $30,000 a hectare.

Increased demand for process crops by J. Wattie Foods, Flavour Dry and Grower Goods had put pressure on land rentals as well as values.

Rent for land on the Heretaunga Plains ranged from $1250 to $2000 a hectare a year.

Process companies were looking to Central Hawke’s Bay to grow their sought-after range of crops, he said.

This trend was reflected in higher Central Hawke’s Bay land values, with prices upward of $7500 a hectare being paid for heavier silt-loam soils.

Mr Logan said selected Central Hawke’s Bay sites with high fertility soils would continue to increase in value.

Lifestyle properties were selling well, with undeveloped six-hectare blocks under $80,000 hard to find in the Hastings district. Central Hawke’s Bay values started at $50,000.

Mr Logan said developed lifestyle properties changed hands at values ranging from $200,000 to $1-million.

Demand for forestry blocks remained high. Most forestry purchases occurred in the northern Hawke’s Bay- East Coast region, with investors paying $600 to $1650 a hectare for steep land in the Wairoa-Tutira area.

Photo caption – Mr Stone … demand has cooled considerably.