PROPERTY: Overberg Farms Popular
Recent Western Cape Business News
A weakened rand may mean more belt-tightening for consumers – but it may also be good news for farmers wishing to take advantage of the export market.
Pam Golding Properties reports that there has been an increase in interest in agricultural properties in the Western Cape’s Overberg region – home to some of the country’s most fertile land, and renowned for its fruit, wine, grain and livestock farms. The demand is coming not only from serious commercial farmers, but also from lifestyle buyers.
Recent years have seen an increase in the number of wine farms in the Elgin and Grabouw areas in particular – spurred in part by a decline in the fruit business in the 1990’s, causing some farmers to replace their orchards with vineyards. The Hemel-en-Aarde Valley is now producing some outstanding Pinot Noir wines, while the cooler coastal areas around Walker Bay provide the ideal topography and climate for the noble white grape cultivars. PGP’s area manager Adrian Kuiper says he currently has several wine farms on the market, ranging in price from R9 million to R20 million.
Meanwhile the past two years have seen a recovery in the fruit market, with the decline in the rand once again boosting exports.
Says Kuiper: There is very little stock on the market at present, due to the industry’s surge in productivity and profitability. Land prices have increased to around R250 000 per hectare.”
“Livestock and grain farms meanwhile remain economically viable,” he continues, “and the larger sheep, dairy and beef farms tend to demand – and achieve – exceptionally good prices. However these are seldom available for purchase, as many are old family farms passed down through the generations.”
There has also been a lot of interest in the Overberg from foreigners and from people migrating from Kwa-Zulu Natal and Gauteng. The bulk of sales however remain to Cape-based buyers, either starting out in the farming industry, or expanding on their existing businesses.
The demands of the lifestyle buyer are completely different, as rather than approaching the purchase from serious commercial motives, they tend to be looking for a place to live or spend weekends - an escape from the hustle and bustle of the city, with at most the opportunity to indulge in some small-scale hobby or niche market farming.
PGP reports that well over 60 percent of its farm stock currently for sale is aimed at the lifestyle market.
“The bulk of our enquiries are coming from lifestyle buyers,” says Kuiper, “with the main criteria being exquisite scenic environments. We have some fairly large mountain farms on the market as well as numerous smaller properties, and these tend to be very reasonably priced for their size. There are a number of very good buys on the market at present, priced anywhere from R860 000 to R13 million.”
A particular focus for this market at present is the Elgin Valley. Kuiper says there has been a huge exchange of land ownership over the past five years, initially with lifestyle buyers moving in when the fruit industry was struggling, and more recently with several record sales of active fruit farms. This change has stimulated significant growth and diversity in the towns of Elgin and Grabouw.
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