Orchards popular as dairy languishes

Prices for horticultural properties are bouncing back with gold leading the way

Although the dairy property industry has fallen on tough times, interest in orchards continues to grow.

This year has seen a steady increase in horticultural sales particularly in the Bay of Plenty, Auckland and Marlborough, and earlier this year kiwifruit orchards in the Bay of Plenty returned to prices on a par with those received before the deadly Psa hit New Zealand.

Commentators say that optimism in the industry is high, especially considering no one wanted to buy an orchard a couple of years ago.

Investors have been expressing interest, along with farmers from other fields who wanted something less time-intensive.

Kiwifruit orchards seem to have benefited the most from the increased interest, particularly those in the Bay of Plenty.

Some green kiwifruit orchard sales have been comfortably above the $300,000 a canopy hectare mark since the start of the year, while sales of gold are more than $400,000 a canopy hectare.

Avocado orchards have also been faring well and Marlborough has been experiencing continuing strength in the viticulture sector.

Real Estate Institute statistics show prices per hectare for horticulture properties increased from $89,047 in 2013 to $132,474 last year and $243,515 a hectare in June this year. The median horticulture farm is about 6ha.

REINZ believes the strong rise in prices has been driven by the recovery of the kiwifruit industry's fortunes.

Earlier this year REINZ rural spokesman Brian Peacock says the kiwifruit industry appeared to be in a pretty solid place.

"There does appear to be a recovery from Psa in the gold kiwifruit as well as the green and that is being conveyed through to sales activity and a renewed enthusiasm in the industry," Peacock says.

Bayleys country sales manager Simon Anderson says several factors are behind the interest in the horticulture sector.

"The first is return and over the last couple of years we have seen some very nice returns from horticulture," he said.

"Another would be management and in particular around kiwifruit and the amazing turnaround since Psa was discovered, plus the quality and varieties we are enjoying whether it be kiwifruit, apples or wine."

Anderson says it doesn't matter whether it is kiwifruit, avocado or pipfruit, if a property is well presented, strongly promoted and showcased to as many buyers as possible then chances are it will sell well.

New Zealand's horticultural production exceeded $7 billion for the first time in April this year.

Wine is the largest horticultural export, valued at $1.3 billion, with kiwifruit the largest fresh fruit export, valued at $930 million.

Apple exports exceeded $500 million this year.