Dairy Sector Drives Strong Rural Property Market Activity in NZ
The latest data from the Real Estate Institute of New Zealand (REINZ) reveals a mixed rural property market due to consistent inflation concerns.
Overall, there were 156 farm sales in the three months ended October 2023, down 20% on the 195 farm sales completed in the three months ended October 2022.
In the year to October 2023, 34.5% fewer dairy farms and 8.6% fewer dairy support farms were sold compared to October 2022.
For the three months ended October 2023, the median sales price per hectare for dairy farms was $32,690 (15 properties), compared to $32,690 (15 properties) for the three months ended September 2023, and $47,565 (24 properties) for the three months ended October 2022.
The median price per hectare for dairy farms has decreased 31.3% over the past 12 months. The median dairy farm size for the three months ended October 2023 was 118 hectares.
Three regions recorded an increase in the number of farm sales for the three months ended October 2023 compared to the three months ended October 2022, with the most notable being Waikato (+6 sales) and Auckland (+5 sales).
Canterbury ( -15 sales) and Bay of Plenty ( -9 sales) recorded the largest decreases in sales.
REINZ rural spokesperson Shane O’Brien says these latest statistics represent a continuing trend throughout 2023 with a decrease in the volume of sales across all categories across most of the country. “An increase in sales is noted in both the Auckland and Waikato regions but a drop in the volume of sales compared to the same time last year was evident in Canterbury and Southland,” O’Brien says.
He says much of the decrease in volume can be offset by a late Spring with many properties coming to the market later than normal due to the wet winter while some vendors could be choosing to wait for some direction from the recent general election before going to market.
“There appears to be no shortage of listings across New Zealand this spring, giving buyers a healthy selection,” O’Brien says.
“Many buyers however are being cautious around environmental compliance and future land uses.”
O’Brien says uncertainty surrounding product prices, particularly for the dairy and pastoral farming sectors, is weighing heavily on buyers’ decisions.
However, he says, the recent confirmation of the three-way coalition between National, ACT and NZ First and the promise of a ‘farmer-friendly’ government should impact market sentiment.
“Strong recent sales in the Waikato in the dairy support sector are an encouraging sign, but there are still some headwinds facing the horticulture and forestry sectors that have slowed sales this quarter,” he explains.
O’Brien says that the median sale price paid across New Zealand has increased slightly in the last quarter and is up on the same time 12 months earlier.
“While this is an encouraging sign, market vendors do need to be mindful that with an abundance of listings and a cautious pool of buyers, any offers when presented may need to be carefully considered as buyers take into account the changing dynamics of the market.”
