New Zealand vineland value drops 60%, but no takers

New Zealand vineyard prices have fallen significantly over the last four years, but the market for vineland is still stagnant, experts say.

Prices across the country have come down by as much as 60% but there are still properties that have been on the market for several years.

John Hoare, viticulture specialist for the Marlborough branch of real estate agent Bayleys, told Decanter.com, ‘Prices [for established vineyards] are as little as NZ$100,000 per hectare (ha), whereas in 2007 they were NZ$250,000.’

However, there are few parties interested in buying cut-price vineland. In Central Otago, some vineyards have been on the market for as long as eight years.

Bayleys’ local agent Trevor Mackay estimated a hectare of established vineyard would cost around NZ$60-$65,000 per hectare but admitted nothing had sold in the past two years.

‘It costs about NZ$60,000 to fully develop a vineyard so any buyer would be getting it at cost,’ Mackay said.

He added that he had vineyards on his books that had ‘dropped 50% in value since they went on the market’ – and that there were many more vineyards for sale than appeared on agents’ websites.

‘Many producers don’t want to show publicly that their vineyard is for sale as it might affect their existing wine sales.’

However Matt Thomson, a consultant winemaker based in Marlborough, does not believe there will be a rush to purchase with many producers unwilling to expand and banks reluctant to lend.

‘I think we have hit the bottom in terms of demand for vineyard land. I would not be advising people to rush out and buy now because I think we will see those prices hold for 12-18 months,’ he said.

Written by Rebecca Gibb in Auckland