Now farms are hot property

Contrary to the most of the property market, sales of agricultural land are buoyant at the moment.

Gerhard Kotzé, CEO of the ERA South Africa property group, says that this is due to a “happy confluence” of elements, including the desire of many city dwellers for an escape from increasingly pressurised and problematic urban lives, and the search by many farmers for new opportunities after receiving land claim settlements.

A further if lesser element, he says, is that of overseas buyers seeking a lifestyle very comparable to that in prime farming areas of Europe and elsewhere but at a fraction of the cost.

“A tranquil lifestyle, the opportunity to turn a profit from a cash crop or activity and perceived value for money relative to, say, a holiday home on the Cape eastern seaboard or a smallholding in Provence in the south of France, is a potent combination, making South African lifestyle farms increasingly attractive,” he adds.

It’s a trend that’s being experienced countrywide but areas of particular activity for the ERA group in this respect include the likes of Upington, Paarl and Thabazimbi.

In the Upington area of the Karoo, the big driver of farm sales recently has been the land claims settlements in neighbouring North West province, which have generated cash-in-hand for numerous displaced farmers.

Dirk Myburgh of ERA Upington says that land prices in the area rose by as much as 100% in the two years to end-2008 but have since stabilised and that demand is strong, with sales only being limited by many existing owners’ reluctance to dispose of their properties.

“This is a primarily sheep area but an additional factor is the emergence of smallholders paying from R10 000/ha for productive land under grape and other cash crops.”

Heinie Gersbach of ERA Gersbach in Paarl reports a similar scenario with numerous enquiries but owners being reluctant to part with their holdings while buyers are hunting for bargains. Nonetheless deals are being done in this wine, grape, wheat and sheep producing area where land values start at around R20 000/ha.

In the Thabazimbi district, ERA Thabazimbi/Bosveld’s Herman Barnard says land claims have been less prevalent than in neighbouring areas and that farm demand is good. Prices range between R6000 and R9000/ha for land that lends itself to game and cattle farming in this bushveld terrain.

Residential eco-estate development is also booming in the area and there are numerous game lodges offering safaris and hunting to local and international clientele, all of which further underpins the demand for farmland.

Article by: www.era.co.za