French vineyard values shrugged off the Covid-19 pandemic in 2020, with average wine property prices lifted by deals in the most expensive parts of Bordeaux. Less prestigious growing areas didn’t do as well, with prices sliding in some regions.
The cost of buying a hectare of vines, a plot the size of a rugby pitch, rose 1.6% to 150,500 euros last year, according to data from Safer, France’s rural property agency. Prices have more than tripled since 1997, with a mostly uninterrupted rise over that period.
Excluding the Champagne region, the cost of vines with a French appellation of origin increased 4.3% to a record 78,100 euros per hectare. The sparkling-wine region north-east of Paris is the country’s most expensive overall, accounting for 52% of France’s total vineyard real estate by value and skewing the numbers.
The health crisis did impact the number of wine-property transactions, down 11% to 8,190 as estate visits became more complicated and buyers pulled out. That was the lowest in data going back almost 30 years, below the previous low point of 2009 after the financial crisis.
The overall value of property changing hands fell 13% to 861 million euros. Only in the Bordeaux-Aquitaine region did the total value of wine-real estate transactions rise, up 4.7% to 231 million euros, even as the number of deals declined 21%.
In Bordeaux, eight sales of prestigious estates accounted for 72% of the transaction value, according to Safer. Those deals helped explain a 9% increase in average vineyard prices in France’s second-most valuable wine region.
Safe Haven Bordeaux
In Pauillac on the Left Bank of the Gironde estuary, the average price for a hectare climbed 22% to 2.8 million euros. As the large estates gobble up the remaining small vineyard owners of Pauillac, Saint-Julien and Margaux year after year, property prices could continue to rise, according to Safer. The top-end properties are seen as safe-haven investments at a time of financial uncertainty, the agency said.
The lofty heights for Bordeaux’s elite names contrast with more down-to-earth growing areas, with generic-label Bordeaux vines falling 13% to 13,000 euros per hectare. Vineyards producing generic Medoc slumped 20% to an average 40,000 euros per hectare, as the area struggles with faltering exports and supermarket sales, Safer said.
Two developments of note in Bordeaux’s more affordable wine areas: certified-organic vines in good health traded at a premium, and plots sensitive to freezing had a hard time finding buyers. The latter seems prescient, with France suffering its most damaging spring frost in decades this year, and climate change increasing the risk of such events.
In Burgundy, prices hikes were more modest than for its bigger rival, but across the board. While the price of grand cru vines that traded rose 4.1% to 6.77 million euros per hectare, regional Burgundy appellations – the cheapest wine property in the Cote d’Or departement – rose 4.9% to an average 47,200 euros.
Champagne values mostly declined, with the average per-hectare price slipping 1.3% to 1.1 million euros. The grand and premier cru vines of Montagne de Reims and Grande Vallée proved more resilient, climbing 7.2% to average 1.24 million euros per hectare.
Resilient Cognac
In Cognac, the protected origin that exclusively supplies the grapes used to produce the eponymous spirit, prices climbed across the appellation. Cognac exports have remained relatively resilient during the pandemic, after years of growing demand from countries including the U.S. and China.
Vineyard prices on average fell in the production areas of Alsace, Languedoc-Roussillon and south-west France. The cost of buying vines for making wine in Corsica continued to rise, even as Safer said very little property changed hands.
Overall wine property values rose in Val de Loire-Centre, with the Loire Valley presenting a study in contrasts. While the price of vines in Sancerre jumped 29% to 220,000 euros per hectare, the biggest gain in the data published by Safer, the more modest origin of Bourgeuil slumped 30%.
I’ll take a more localized dive into the Safer data in coming days and weeks, including a look at the longer trends for some appellations in places such as Bordeaux and the Loire Valley. So don’t hesitate to check back in at Wine Graphs!