A reinterpretation of the value attributes of agricultural land for the valuation of farms bought for lifestyle purposes
Date
2009-03
Authors
Reed, Lily Lozelle
Journal Title
Journal ISSN
Volume Title
Publisher
Stellenbosch : University of Stellenbosch
Abstract
Traditionally, agricultural land was regarded mainly as a production factor. Accordingly, in their
application of the market sales comparison approach to agricultural land, valuers relied on a set of
attributes related to agricultural production as the primary determinants of an agricultural property’s
highest and best use (HBU) and market value. These characteristics were measurable and related to
the property’s income-generating capacity.
The emergence of a multi-functional rural land market with alternative uses of agricultural land,
such as for lifestyle purposes, has transformed this concept. Lifestyle inspired buyers often focus on
a wider range of attributes not necessarily related to income, but associated more with satisfaction
derived from the property. This creates a measurement problem for agricultural land valuers, as the
characteristics valued by lifestyle buyers are more intangible and subjective, which leave valuers
without a base from which to value such properties. The presence of lifestyle inspired buyers makes
agricultural land valuations more demanding as it implies different interpretations of the same farm
and complicates the choice of a single HBU.
The continued use of familiar conventional farming attributes by valuers when valuing farms where
lifestyle motivations are present, and the omission of less measurable characteristics, implies that
the market sales comparison method cannot be executed accurately. The objectives of the study
were twofold: to reveal the dominance of value attributes applicable to farming as HBU when
valuing farms bought primarily for lifestyle purposes and to identify the characteristics of land
important to lifestyle inspired farm buyers.
Description
Thesis (PhD(Agric) (Agriculture))--University of Stellenbosch, 2009.
Keywords
Lifestyle buyers, Market sales comparison, Multifunctional land market, Dissertations -- Agriculture, Theses -- Agriculture