Farm sales are dropping but the rural real estate market remains reasonably solid, according to the Real Estate Institute of New Zealand (REINZ).
Overall, there were 520 farm sales in the three months ending December 2020, compared to 441 farm sales for the three months ending November 2020 (+17.9%), and 345 farm sales for the three months ended December 2019.
1,462 farms were sold in the year to December 2020, 15.6% more than were sold in the year to December 2019, with 26.2% more dairy farms, 9.6% less grazing farms, 32.0% more finishing farms, and 23.8% less arable farms sold over the same period.
The median price per hectare for all farms sold in the three months to December 2020 was $27,317 to $22, 981 recorded for three months ended December 2019 (+18.9%).
The median price per hectare decreased 1.6% compared to November 2020.
The REINZ All Farm Index increased 2.5% in the three months to December 2020 compared to the three months to November 2020.
Compared to the three months ending December 2019, the REINZ All Farm Price Index rose 1.4%.
Eleven of the 14 regions recorded an increase in the number of farm sales for the three months ending December 2020 compared to the three months ending December 2019, with the most notable being Waikato and Northland.
Otago recorded the only decline in sales.
Brian Peacocke, REINZ rural spokesman, says “Sales figures for the three month period ending 31 December 2020 reflect a further consolidation in the results which have been emerging in recent months, with dairy in particular achieving the strongest December since 2017.
“As is always the case, climate is the uncontrollable variable, so it was regretful that heavy rain and hail in the South Island in December caused flooding to pasture land and severe damage to horticultural crops in both the Central Otago and Nelson/Marlborough regions.
“The degree of damage was such that some growers and orchardists have lost a major portion of their income for the year which is most distressing for those involved,” Peacocke says.
“Of particular encouragement is the resilience of the dairy industry with current Global Dairy Trade Auctions being positive enough to encourage Fonterra to increase both its mid-season price and the forecast for the end of season payment – extremely positive for the dairy industry and for the overall economy.”