Experts say until the issue is resolved, country could see an increase in the sale of agricultural property
Land expropriation without compensation could see an increase in agricultural property being sold as farmers and property owners consider the potential outcomes of the policy.
The uncertainty that still surrounds the policy implementation, and the fact that buyers may not be keen to buy agriculture property until clarity is obtained, is not helping. The outcome t
Topics: Agricultural, Land Expropriation
Drought takes severe toll on farming property market
The next few months will be testing for the Western Cape’s agricultural property sector as it struggles to stand steadfast in the face of unrelenting pressure from the ongoing drought, which has severely hit the region.
Some markets are already suffering declines while others are reported to be surviving the challenges.
Topics: Harcourts South Africa, Agricultural, Harcourts Midlands
South Africa is experiencing one of its worst droughts in decades. With five out of nine provinces being declared disaster zones, concerns over food security and high food prices are adding pressure to an economy already under strain. Many farmers are facing massive losses and this is indeed a dire situation. How does this affect the agricultural property market though?
In recent years much has been said about the demand for agricultural property. In 2013 a local asset venture capital firm released figures showing that returns on investments for the ten years prior to that South African farmland regularly outperformed those of local equities, bonds and real estate.
Despite often uncertain economic conditions investment in agricultural property has consistently shown growth and has mostly been unaffected by external threats. We predict this trend will continue in the short term. In the past agricultural property still sparked interest among investors even during tough economic conditions. In many cases if farmers are forced to sell investors purchase the property and then continue to work with the farmer. Alternatively investors employ new staff and farm production remains a going concern.
If the agricultural business and financial markets can continue to work on solutions to mitigate risk for farmers there is no reason the drought will have a negative impact on farmland buying and prices. This can most notably seen in the continued high demand for game farms.
We predict that if rains return to normal again next season and economic uncertainty stabilizes interest in agricultural property investment will once again show consistent growth over the medium and long term.
Buyers will take a long term view of an agricultural investment and as long as they have the means to get through drought and other threats there will be good returns on investment.
Statement by
Richard Gray
Harcourts Africa Chief Executive Officer
Topics: Agricultural