DETERMINATION OF PRIORITIES OF BUYERS REGARDING VALUE CONTRIBUTING CHARACTERISTICS OF FARM LAND IN THE STELLENBOSCH DISTRICT, SOUTH AFRICA

Abstract

The use of the comparable sales method to value farm properties requires that professional valuers must think like a typical buyer of farm properties in a particular area. The Stellenbosch district, located on the periphery of the Cape Metropole, is a famous wine-producing area. The typical buyer is sophisticated and wealthy: someone for whom lifestyle could probably be just as important as the income generating capacity of the wine estate. A variety of site and situational factors have to be considered by the valuer: some of which are easily identifiable and quantifiable, where others are more elusive. This study aimed to identify and order the more important motivations as perceived by typical buyers in order to provide guidelines to valuers. An empirical study was done to determine buyers' and property characteristics, and buyers' ratings of possible motivations for buying land in Stellenbosch. Factor analysis provided a hierarchy of motivations. Terroir is the dominant site factor and the most important motivation, followed by location relative to Cape Town, the aesthetic beauty of the property, accessibility of the property, potential for new/more vineyards, meso-climate and the status of the “address”.