The performance of wine markets across the world

Global wine consumption is down 12% from its 2007 peak, and even though production has also fallen by 20% over the past 20 years, few of the world’s key vineyard regions remain unscathed. Areas with vineyards supplying grapes in bulk to large-scale winemakers are most exposed.

New Zealand’s Marlborough region, for example, saw vineyard values correct by as much as 33% in 2024 after hitting a peak in 2023, says Kurt Lindsay of Bayleys, Knight Frank’s local partner. “A lot of firms were still sitting on 2023 stock, and bulk wine prices fell from NZD$7 to NZD$3/litre.” Lindsay isn’t too pessimistic, though. “The Marlborough Sauvignon brand is very strong and I think we are close to the bottom of the trough. Now is a good opportunity to buy vineyards at 2019 prices.”

A challenging climate for wine producers in Latin America

Producers in Chile’s Colchagua Valley have also been hit hard. “Over the past few years, grape prices have been horrific,” says Matt Ridgway of Chile Investments. However, the availability of alternative options, such as planting cherry trees, means land values haven’t fallen. “People won’t sell for a loss,” notes Ridgway. “There are still no bargains.”

Elsewhere in Latin America, a similar trend is being seen in Argentina’s Mendoza region, says Patrick Kinnersly of real estate agent Contacto Propiedades. “A lot of vines have been replaced by vegetables. Garlic is now one of our biggest exports.”

Despite this, vineyard prices have remained firm during 2024. “We are seeing more foreign investment since President Javier Milei’s economic reforms, and businesses are more optimistic,” explains Kinnersly.

The impact of Trump on the US wine market

Winemakers in the US’s biggest grape‑growing regions are also on tenterhooks to see what impact President Donald Trump’s second term might have on a wine market that is already feeling the pressure from the drop in consumption.

Deporting immigrants who do a lot of the work on vineyards would push up production costs, while the implementation of tariffs would hit exports, points out David Ashcraft of Vintroux Real Estate, which specialises in the Napa and Sonoma Valley markets. Values for premier Napa vineyards remain stable, but prices in less exalted areas could have fallen by 10% to 30% during 2024, he reckons.

The effect of tariffs in Australia

Australia’s wine market is one that knows only too well the damage that trade tariffs can cause. Wine exports to China totalled AUD$1.4 billion in 2019, but the imposition of punitive import tariffs by the Chinese government as part of a trade dispute saw sales crash to virtually zero in 2023.

The tariffs were lifted in April 2024, but vineyard prices in South Australia’s Riverland region are still likely to have fallen by as much as 50% last year, says Jason Oster, an agribusiness specialist and valuer at Knight Frank Australia. Prices in the Barossa Valley, which produces higher-value wines, have seen smaller declines, he adds. “Buyers, ironically including Chinese HNW investors, are coming back to the market.”

The value in offering high-end experiences

A recurring theme around the world is the wide variation in vineyard values and performance, even within relatively small regions. Small boutique or lifestyle vineyards and larger brands seem to be weathering the storm better than medium‑sized businesses that can’t rely on scale or provenance.

The North Fork area of Long Island, New York, is an example of a smaller wine‑producing area that has proved resilient in the face of global pressures. “We’re in the backyard of Manhattan and there is huge demand for local food and drink,” says Melissa Principi, a broker for Douglas Elliman, Knight Frank’s residential partner in the US. “North Fork has become a real destination.”

Many of the people buying vineyards are successful financiers looking for a lifestyle investment who have added stylish tasting rooms and restaurants to their purchases, adds Principi.

“Fifteen years ago, the wine here wasn’t great, and there wasn’t much to do for tourists, especially outside of summer,” says Kristy Naddell, another Elliman broker from the area. “But over the past five to seven years, a lot of wineries have changed hands and are now offering much higher‑end experiences.”

A mixed picture for France’s wine-producing regions

Vineyard values have always varied hugely in France, with vines in appellation d’origine contrôlée (AOC)‑designated areas and those, such as Provence, that are popular with second‑home and lifestyle buyers worth far more. However, the gap seems to be widening. According to data from French land registry authority SAFER, the average price for AOC vineyards is currently around €150,000/ha, but this slides to just €15,000/ha for non‑AOC areas.

In Bordeaux, home to the bulk of the world’s investment‑grade wines, prices also vary widely. However, only the most prestigious vineyards, which can sell for well over €1 million/ha and rarely come to the market anyway, would find buyers at the moment, points out Nicolas Parmentier, Head of Vineyard Transactions at Janssens Immobilier | Knight Frank.

This lack of market evidence means the official SAFER figures, which show an average sales price for AOC vineyards of €109,000/ha and an annual drop in values of just 4%, don’t accurately reflect the challenges facing the region. “Only about 5% of vineyards are doing okay. Thousands of hectares are being uprooted,” explains Parmentier.

Elsewhere, prices for the most iconic Burgundy vineyards can still exceed €1 million/ha with no weakening of values. The Champagne region, despite pumping out huge volumes of the fizzy stuff each year, also seems immune to the global downturn, with vineyard values nudging up.

Wine: an emotional investment

Like Bordeaux, Spain’s main red wine‑producing areas such as La Rioja are suffering from overproduction, but there is a clear distinction between the market for wineries and the vines themselves, says Puri Mancebo of specialist agency Rimontgó.

“There are a lot of wineries for sale with the prices open for negotiation, but selling a vineyard is much more emotional. They have often been in the hands of the same families for generations and so far we haven’t seen enough forced sales to bring values down. But that could change.”

Demand for wineries in areas specialising in white wine, like Galicia, is buoyant, notes Mancebo. “There is local and international interest, including from Latin Americans.”

How will climate change transform the winemaking landscape?

Shifting weather patterns are starting to influence the global vineyard market, with some regions set to benefit. “The Loire, south Burgundy and Beaujolais, where the climate is becoming more conducive to winemaking, are the future of wine in France,” says Parmentier.

With average temperatures rising, the area of vines in the UK, not to mention the quality of the wine produced, is growing significantly, reports Will Banham of Knight Frank’s Viticulture Team. “Counties such as Kent in the southeast of England producing predominantly sparkling wine have traditionally been the heartland of the industry,” says Will. “But now we are seeing vineyard values rising more rapidly in other counties such as Essex in the east where growers are experimenting with different grape varieties to create still rosé and red wines.”

Climate change mitigation is also influencing land use in the traditional wine‑growing areas of Portugal, says João Pinto Marques of the Private Consulting team at Quintela Penalva Knight Frank. “People are looking for land for carbon sequestration projects in tandem with vines. There have been some big deals.”

With Gen Z reportedly set to be the most alcohol‑shy generation ever, global weather conditions becoming increasingly erratic, and a tariff enthusiast in residence at the White House for the next four years, interesting times lie ahead for winemakers and vineyards around the world.

Find out more about the types of wine being produced across the globe and where to invest, alongside other key insights into global wealth, in the 2025 edition of Knight Frank’s The Wealth Report.

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