Monday, 17 December 2012 09:39

Farm sales up

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Data released by the Real Estate Institute of NZ ("REINZ") shows there were 25 more farm sales (+9.8%) for the three months ended November 2012 than for the three months ended October 2012.

Overall, there were 281 farm sales in the three months to end of November 2012, compared with 315 farm sales in the three months to November 2011, a decrease of 34 sales (-10.8%). At total of 1,417 farms were sold in the year to November 2012, 23.4% more than were sold in the year to November 2011.

The median price per hectare for all farms sold in the three months to November 2012 was $22,885; a 15.2% increase on the $19,872 recorded for three months ended October 2012. The median price per hectare increased by 11.9% compared to November 2011.

The REINZ All Farm Price Index rose by 7.6% in the three months to November compared to the three months to October, from 2,852.46 to 3,069.52.

Seven regions recorded increases in sales volumes for the three months ended November 2012 compared to the three months ended November 2011. Auckland recorded the largest increase in sales (+12 sales), followed by Nelson (+6 sales) and Manawatu/Wanganui (+4 sales). Seven regions recorded decreases in sales volume with Northland recording the largest fall (-16 sales), followed by Southland (-14 sales) and Bay of Plenty (-9 sales). Compared to the three months ended October 2012 seven regions recorded an increase in sales, lead by Waikato (+10 sales).

"The rural property market has had a strong finish to the spring selling season with a 10% lift in sales volume over October and prices up 12% compared to November last year " says REINZ Rural Market Spokesman Brian Peacocke. "Several regions report the strongest level of activity in 2007, with a strong increase in the Far North, increased horticulture sales in Gisborne and strong demand for viticulture properties in Marlborough."

"Further, after a noticeable period of absence, first farm buyers, particularly sharemilkers, are actively pursuing properties in Waikato and Taranaki. Much of this activity is being stimulated by vendors being realistic about pricing and low interest rates on borrowing."

Grazing properties accounted for the largest number of sales with 49.1% share of all sales over the three months. Finishing properties accounted for 15.7%, with Horticulture properties accounting for 11.0% and Dairy properties 10.7% of all sales. These four property types accounted for 86.5% of all sales during the three months ended November 2012.

Dairy Farms
For the three months ended November 2012 the median sales price per hectare for dairy farms was $37,166 (30 properties), compared to $27,368 for the three months ended October (13 properties), and $36,766 (27 properties) for the three months ended November 2011. The median dairy farm size for the three months ended November 2012 was 96 hectares.

Included in sales for the month of November were 22 dairy farms at a median sale value of $40,561 per hectare. The median farm size was 96 hectares with a range of 45 hectares in Manawatu to 370 hectares in Bay of Plenty. The median production per hectare across all dairy farms sold in November 2012 was 976kgs of milk solids.

The REINZ Dairy Farm Price Index fell by 0.8% in the three months to November compared to the three months to October, from 1,813.43 to 1,799.35. Compared to November 2011 the REINZ Dairy Farm Price Index fell by 11.6%. Further details on the REINZ Dairy Farm Price Index are set out below.

Finishing Farms
For the three months ended November 2012 the median sales price per hectare for finishing farms was $18,950 (44 properties), compared to $20,402 for the three months ended October (41 properties), and $20,445 (41 properties) for the three months ended November 2011. The median finishing farm size for the three months ended November 2012 was 105 hectares.

Grazing Farms
For the three months ended November 2012 the median sales price per hectare for grazing farms was $16,829 (138 properties) compared to $11,671 for the three months ended October (129 properties), and $16,591 (187 properties) for the three months ended November 2011. The median grazing farm size for the three months ended November 2012 was 61 hectares.

Horticulture Farms
For the three months ended November 2012 the median sales price per hectare for horticulture farms was $88,889 (31 properties) compared to $157,838 (35 properties) for the three months ended October, and $106,471 (25 properties) for the three months ended November 2011. The median horticulture farm size for the three months ended November 2012 was seven hectares.

Lifestyle Properties

The lifestyle property market saw a 24.1% (+294 sales) increase in sales volume in the three months to November 2012 compared to November 2011. 1,516 sales were recorded in the three months to November 2012 compared to 1,222 sales in the three months to November 2011. 138 more sales were recorded compared to the three months to October 2012 (+10.0%). Sales in the month of November were the strongest since November 2007.

Twelve regions recorded increases in sales compared to October while two recorded decreases. Auckland recorded the largest increase (+30 sales), followed by Canterbury (+22 sales) and Northland (+17 sales). West Coast recorded the largest fall in sales (-6 sales), followed by Bay of Plenty (-1 sale). Compared to November 2011 10 regions recorded increases in sales with three regions recorded decreases, Southland was unchanged

The national median price for lifestyle blocks improved by $14,750 (+3.2%) from $460,250 for the three months to October 2012 to $475,000 for the three months to November 2012. Compared to three months to November 2011 the median price rose by $25,000 (+5.6%).

The number of days to sell for lifestyle properties improved by eight days, from 71 days for the three months to the end of October to 63 days for the three months to the end of November. Compared to the three months ended November 2011 the number of days to sell improved by 27 days from 90 days to 63 days. Southland recorded the shortest number of days to sell in October at 46 days, followed by Otago at 48 days and Taranaki at 49 days. West Coast recorded the longest number of days to sell at 178 days, followed by Bay of Plenty at 135 days and Northland at 74 days.

Commenting on the lifestyle property market Brian Peacocke said, "The lifestyle market has seen a healthy increase in sales volume in November, with strong activity in Auckland and increasing activity in Waikato driven partially by buyer enquiry from Auckland and Australia."

"The Nelson and Marlborough regions have also seen a healthy increase in listings, and the Canterbury market remains strong. The overall tone for the lifestyle market appears solid and reasonably optimistic."

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