Now is the right time to be developing avocado orchards, according to a New Zealand real estate agent, who says the international growth in the popularity of the fruit is leading to a greater amount of investment within the industry.
Bayleys Country Sales Manager Matt Clutterbuck, is based in Tauranga, in the Bay of Plenty, and has seen prices increase from around the NZ$150,000 per canopy hectare 24 months ago to as high as $400,000 in 2018, with consistent sales averaging around the $250,000 - $300,000 per canopy hectare in the Bay of Plenty.
"There has been a real increase in demand recently," he said. "(Buyers) can see that good story of NZ avocados going around the world, as well as improving returns over the last few years, and future forecasts looking stronger. We've got a biannual crop with the avocados, however we are starting to see crops improving and becoming more consistent year on year, where the peaks are not so high and the troughs are not so low. A bit more consistency around yield is one, but definitely the returns are also a step up. It's a credit to NZ Avocado, and the work that they have been doing behind the scenes in regards to their research and development, and just getting the product across the world. It's on the back of their good work that these prices have gone up."
Photo: courtesy NZ Avocado
He also notes that some farmers are using avocado orchards as a retirement option, growing the fruit on a small scale to stay connected to the land.
"For the Bay of Plenty, a lot of them are smaller," Mr Clutterbuck said. "They might be 3-5 canopy hectares, that's not just value in the size of them, but also in the location; a really premier lifestyle location. When we value something, we look at the per canopy hectare, but also what the land is worth in terms of lifestyle. For example, we sold a 2.051ha property last week for NZ$1.6million in a nice location, (however) it had about 130 trees on it and a nice home. But definitely the canopy hectare rate has increased over the past few years. We have also recently sold a 5.6920ha property with 140 trees, nice home and additional plantable land for $1.8million"
Photo: A recently sold avocado orchard property at Wharawhara Rd
Mr Clutterbuck adds that it is not just the existing orchards that are attracting plenty of investment, but also land to expand crop sizes and undertake new plantings.
"There is also a lot of land getting developed at the moment, which is the same as kiwifruit land, so a lot of people are looking for bare land to grow both kiwifruit and avocados at the moment," he said. "We are seeing a lot of development going on across Northland and the Bay of Plenty with avocados. It is hard to get trees at the moment, so that means there is a lot of green fields under development at the moment."
Photo: A recently sold avocado orchard property at Wharawhara Rd
But he does have a warning to potential buyers to ensure that they do their research into what it takes to run an avocado orchard, and it is not treated as just a 'plant and forget' exercise. Mr Clutterbuck says this strong growth should continue for the next 6-12 months at least, and the benefits will feed back to growers.
"The work and direction that NZ Avocado is going in (around the world) - it's becoming a trendy fruit to eat, with all the health benefits," he said. "Definitely that (demand) is going to remain. I think as long as the rest of the world, especially the Asian market, continue to get a taste for avocado, it is going to increase. So, a few things do need to stay aligned, for the increase to continue, but if things stay as they are, the demand will remain. We are seeing it pop up in a lot of different dishes, thanks to a few influential chefs that use avocados a lot. So, avocados are trending right now, and there is a couple of great growing places in the Bay of Plenty and the Far North."
Bayleys has just listed a property at Knyvette Road it has got a mix of mature trees and three-year-old trees.
For more information
Matt Clutterbuck
Bayleys Real Estate
Phone: +64 7 571 4674
[email protected]
www.bayleys.co.nz