Vineyard Land Value Trends

Through the 1990’s the wine industry in Hawkes Bay went through major expansion. By 1995 1600 hectares had been established and by 2003 the area had more than doubled to 3700 hectares. By 2006 it is estimated that a total of 4600 hectares of grape vines will be established within Hawkes Bay. Light and naturally infertile, free draining soils that were previously considered to be of low value quickly became recognised as the ideal soil environment for classic wine grapes and values rapidly escalated through the 1990’s. Red metal soils in the “Ngatarawa Triangle” near Hastings, commonly valued at $12,000 per hectare in the mid 1980’s, were quoted at $30,000 by the mid 1990’s and $45,000 by 2000. Bare land within the “Gimblett Gravels”, an ancient river bed of the Ngaruroro River once considered of little value, is considered even more prestigious for premium wine grape growing and small bare land parcels have changed hands at prices in excess of $60,000 per hectare. With indications that wine grapes may soon exceed wine makers requirements there has been a considerable drop off in new investment in the industry over the past two years. There have been few significant sales of vineyard quality bare land over the past two years and it is suggested that the value of this category of land has eased to a significant degree. Similarly vineyard prices have eased depending on the quality of the individual property and the existence for a new buyer of an extended grape supply contract.

Filed under: Investment, Moving to New Zealand, Vineyards