HEARTBEAT - Rising demand for avocado properties
Avocado orchards have recently changed hands at around $450,000 per hectare, close to prices currently paid for green kiwifruit.
A highly productive three canopy hectare coastal Bay of Plenty avocado orchard, with 280 trees, sold for $2.05 million, 3 years after its previous ownership change, at $1.3 million.
With many looking for a lifestyle property with a revenue stream, and demand from the huge Chinese market, previously untapped for avocado, fueling interest, realestate.co.nz reports the most searched word on its site by Aucklanders looking for property outside Auckland is ‘avocado.’
Although a typical avocado property might feature a few hectares planted in the South American rainforest native, much more substantial development is occurring in the Northland district of Tapora. Some of the around half-a-dozen avocado growers based there have recently purchased large blocks of highly productive land previously used for dairy or beef finishing, and 200 to 300 hectares in Tapora is going into avocados, with additional land also potentially going the same way.
One prominent Bay of Plenty packhouse reports its growers’ average yield was $52,000 per hectare last year and $47,500 per hectare for export avocados. As significant variability is an issue for the crop, this year, returns are likely to be much lower. Where the better performing orchards produced 3,000 to 4,500 trays per hectare last year, others only produced 500 trays. While production will be lower, this year’s return per export tray is expected to match last season’s.
Double-grafted avocado trees are selling for $50 each, though demand is high. Irrigation development and frost protection are also factors when establishing an orchard.
Although trees produce after two years, it takes five to six years to achieve a commercial return from avocados, longer than for kiwifruit. However, whether to plant kiwifruit or avocados has become a legitimate debate. Some land will suit either, and kiwifruit is better at altitude, though free-draining coastal sites, with good soil, and a night time spring temperature of 16 or 17 degrees, enabling a pollination event if bees visit when both male and female flowers are out, are ideal for avocados.
For more information, please contact your local sales consultant or local PGG Wrightson Real Estate office.