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.
This comes despite an easing in the volume of sales.
Brian Peacocke, rural spokesman for REINZ, says the sales volumes reflect an easing in most categories, while still remaining stronger than the equivalent periods for 2019 and 2020.
“The exception to the easing trend which is expected during the winter period, is the category of finishing properties sales which continue to hold at current strong levels, this being a continuing feature in the current marketplace,” he says.
In the finishing category, 117 farms were sold for the three month period ended July 2021, at a median sale price per hectare of $33,345. Peacocke told Dairy News that it was farmers who were buying these farms in most instances.
“There will be occasionally people stepping up from a lifestyle block but mostly people would be looking for finishing blocks to add to an existing property base or a retirement block to move on to from a bigger property,” Peacocke says.
The median finishing farm size for the three months ended July 2021 was 42 hectares.
Overall, there were 359 farm sales in the three months ended July 2021, compared with 400 farm sales for the three months ended June 2021, and 333 farm sales for the three months ended July 2020.
In the year to July this year 1,720 farms were sold, 42.5% more than were sold in the year to July 2020, with 146.7% more Dairy farms, 17.9% more Dairy Support, 27.8% more Grazing Farms, 58.4% more Finishing Farms and 38.1% less Arable farms sold over the same period.
The median price per hectare for all farms sold in the three months to July 2021 was $27,015 compared to $24,050 recorded for the three months ended July 2020, up 12.3%.
The median price per hectare decreased 0.6% compared to June 2021.
The REINZ All Farm Price Index increased 10.4% in the three months to July 2021 compared to the three months to June 2021.
Compared to the three months ending July 2020, the REINZ All Farm Price Index increased 16.9%.
Seven regions recorded an increase in the number of farm sales for the three months ended July 2021 compared to the three months ended July 2020, with the most notable being Otago (+14 sales) and Northland and Nelson/Marlborough (+12 sales).
Manawatu-Wanganui (-14 sales) and Wellington (-8 sales) recorded the biggest decreases in sales.
“While issues such as the Covid-19 pandemic and the recent Olympics have dominated the media in recent weeks, the rural community has continued steadily with the demands of feeding animals during wildly variable weather conditions, which is situation normal for the July period,” says Peacocke.
“Calving in the national dairy herd is well advanced, as is the case for lambing in the national flock, apart from southern high country, so to date, flooding has been more of an issue rather than heavy dumps of snow.
“On the livestock front, reasonable feed reserves have resulted in extra-ordinarily high prices being paid for last season’s lambs to be finished for the late winter/early spring market; the beef schedule is moving upwards on an incremental basis with a promise of more to come, and the dairy industry pensively observes the recent pattern of volatility in the global dairy trade auction system with questions regarding the impact on the payout for the current season."
