“The market for agricultural and forest land in France is 80 to 90 percent French,” says Benoît Léchenault, director of Agrifrance, the division of BNP Paribas Property that specializes in agricultural transactions. ‘The other investors are mainly Europeans and mostly Belgians.’ Given the prices for agricultural land in our country, it should not be surprising that Belgian investors are looking across the border.
Over the past ten years, the price of agricultural land in France has risen by an average of 2.6 percent per year. In 2022, a hectare of agricultural land cost an average of 8,000 euros and pasture land for livestock farming 5,450 euros. For the most expensive land, for example in Nord-Pas-de-Calais, you will have to pay more than 20,000 euros.
But even that highest price is still a lot lower than the average price in Belgium. According to the most recent Agricultural Barometer of the Federation of Notaries (Fednot), this amounted to 53,193 euros per hectare in the first half of 2022. That average hides major differences. In Flanders the average price was 63,105 euros, compared to 37,011 euros in Wallonia.
In France, the increase of recent years appears to be over. Prices fell by 1.5 percent in 2022. ‘Is that bad? It is healthy for a market to reach equilibrium after ten years of rising prices,” says Léchenault.
In Belgium, the return on agricultural land for investors is often below 1 percent. In France, renting agricultural land yields 2.5 to 4.5 percent, depending on the price of the land and the crops grown on it. Any capital gains upon sale can increase that percentage.
Forest lands
Private individuals who purchase forest land often do so more for the ‘experience value’ than for the return. If you attach particular importance to the latter, then you are better off in France than in Belgium for such land.
In recent years, the demand for forest land in France has increased significantly. In 2022 there were 21,850 transactions with a total value of 2.32 billion euros. That is an increase of 140 percent compared to ten years ago.
While in Wallonia you can easily pay 20,000 euros per hectare, in France it is 700 to 14,800 euros per hectare of forest land. Over the past ten years, the price per hectare has increased by an average of 3.3 percent per year. The average price of 4,630 euros per hectare in 2022 was 4.2 percent higher than in 2021.
If you invest in forest land for timber yield, you must pay attention to which type of wood you choose. Leafwood prices are holding up quite well, but pine prices fell 20 to 30 percent in the final months of 2022 due to a slowdown in U.S. construction and import restrictions from China.
Vineyards
If you are interested in buying vineyards in France, it is best to immediately distinguish between the appellations. In the Bordeaux region, a hectare in the Pauillac region would cost between 2.9 and 3.6 million euros in 2022, while a hectare that produces lower quality red Bordeaux wine will only cost you 17,000 to 25,000 euros. For a grand cru vineyard in the Burgundy region you pay between 8.2 and 17.9 million euros per hectare.
The price of the vineyard is determined by the quality of the wine it produces and the demand for it on the market. Demand for cheaper red Bordeaux wines has fallen, while expensive quality wines continue to have their audience. Saint-Emilion and Pomerol have become more expensive on average by 18 and 15.7 percent over the past ten years. The lower quality vineyards experienced an average increase of 1 percent.