Dairy Sector Drives Strong Rural Property Market Activity in NZ
The latest data from the Real Estate Institute of New Zealand (REINZ) reveals a mixed rural property market due to consistent inflation concerns.
He says the vine killing disease Psa impacted growers' balance sheets significantly, but the banks were flexible in working through Psa issues with growers.
"Most growers were able to survive Psa and see their orchard values not only recover but increase significantly. Land values in kiwifruit country are through the roof, particularly the Gold but even the Green.
"The kiwifruit industry is attracting a lot of attention in the primary sector compared to what's going on with other primary industries."
Orchard gate returns are about $65,000/ha on average across the whole industry. That's compared to about $30,000 in the 2005-06 period.
Limmer adds that Gold3 has been a big driver of the shift, so has greater productivity overall, particularly in Green.
The Green on average is forecast to maintain on average $50,000/ha; the cost per hectare has risen significantly in the last few years from about $20,000 to $25,000 - $30,000/ha.
Psa forced growers to be more vigilant and more proactive in protecting their crops. But productivity has also grown.
Gold is delivering $100,000 - $130,000/ha in yield and market price. On-orchard costs are $30,000 - $35,000/ha and productivity is higher.
The value of a Gold orchard is said to be about $600,000/ha (from about $450,000/ha pre Psa) and Green is about $400,000/ha (from about $250,000/ha).
