Orchard and Lifestyle Land Values

It is not realistic to value orchards (or any other horticultural property) entirely by size, the area planted to orchard or even the condition of the plantings or the orchard improvements. Depending on their location orchards can have a significant and in some cases a quite substantial lifestyle value. Small orchards located in the vicinity of the popular urban centre of Havelock North might well sell at least a 50% to 100% premium over similar orchards located in purely rural orcharding areas. In popular localities, or those becoming popular forlifestyle settlement, carefully selected small horticultural properties can offer investors the prospect of significant future capital gain and be an excellent medium to long term investment, regardless of their ability to achieve a satisfactory economic return in the short term.

In Hawkes Bay there is substantial ongoing buyer enquiry for good quality “lifestyle with income” rural property, a demand largely met with small orchards and vineyards. In the late 1980’s prospective investors and young orchardists might well have been advised to avoid purchasing small properties of fewer than 10 or even 15 hectares, these being commonly considered at that time uneconomic to develop because of their inherent unfavorable scale of operation. This situation has changed considerably, in part because competitive orchard leasing has taken over a substantial proportion of the Hawkes Bay orchard industry and in part also, because organized, skilled, casual contract labor has replaced the need for permanent orchard and vineyard labor. Within reasonable boundaries it is entirely practical for a lifestyle buyer to have major orchard or vineyard labor tasks (pruning, thinning, spraying, harvesting, etc,) performed at an economic cost by skilled, supervised contract labor at an economic cost to their operation.

Orchard leasing however is the preferred option of most lifestylers who purchase orchards. For large orchard operators, leasing small orchard blocks adds significantly to their scale of operation, efficient use of resources and overall profit potential. For the lifestyle buyer there are the advantages of a guaranteed fixed income – free of the inherent risks of orcharding, as well as time for a genuine quality “lifestyle”.

Filed under: Hawkes Bay, Lifestyle, Orchards