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.
There were 36 fewer farm sales in the three-month period to February 2022, marking a 7.6% drop from the three months to February 2022.
REINZ rural spokesman Brian Peacocke says there are numerous factors for this easing, particularly supply and demand
“The income levels are quite high, particularly in dairy they are improving, so in those scenarios property owners tend to hold onto their farms,” Peacocke told Peacocke says another factor is the increasing amount of due diligence required by banks to purchase a farm.
He says potential buyers need “a good case” to get funding from the bank to purchase a farm.
A third reason for the drop, Peacocke says, is the time of the year.
“We tend to get a little bit of an easing as we get into the second half of the year,” he says.
Overall, the median price per hectare for all farms sold in the three months to February 2022 was $30,130, up 17.4% on the figure recorded for the three months ended February 2021.
However, for dairy farms – which accounted for 24% of all sales in the three months to February 2022 – the median sales price per hectare was $41,300.
The REINZ Dairy Farm Price Index decreased 0.5% in the three months to February 2022 compared to the three months to January 2022.
