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.
A total of 1536 farms were sold in the year to July 2013, 6.7% more than were sold in the year to July 2012, says the Real Estate Institute of New Zealand (REINZ).
The median price per hectare for all farms sold in the three months to July 2013 was $20,667; a 15.1% increase on the $17,955 recorded for three months ended July 2012. The median price per hectare rose 4.8% compared to the June quarter.
Compared to the July 2012 quarter, the REINZ All Farm Price Index rose by 4.6%. The REINZ All Farm Price Index adjusts for differences in farm size, location and farming type compared to the median price per hectare, which does not adjust for these factors.
Nine regions recorded increases in sales volume for the three months ended July 2013 compared to the three months ended July 2012. Waikato recorded the largest increase in sales (+25 sales), followed by Auckland (+23 sales) and Bay of Plenty (+13 sales). Four regions recorded decreases in sales volume with Wellington recording the largest fall (-7 sales), followed by Manawatu/Wanganui and West Coast (-2 sales) and Gisborne (-1 sale). Compared to the three months ended June 2013 six regions recorded an increase in sales, lead by Bay of Plenty (+10 sales).
"Ideal late winter and early spring conditions, combined with solid payout predictions for primary produce have raised levels of confidence in the rural sector," says REINZ rural spokesperson Brian Peacocke, "Demand for quality farms is strong across the entire country and in most regions, early signs indicate a shortage of supply for the spring selling season.
"Calving activity reduced sales of dairy farms in July, but sales of finishing and grazing properties have remained at healthy levels in the top half of the North Island as well as in Canterbury, Otago and Southland regions. Sales for other farm types have remained light.
"Activity has remained strong in Southland for all farm types, with particular demand for properties with soils that are capable of sustainable wintering. There is strong interest in grazing properties, particularly dairy and dairy support properties in Otago. The proposed irrigation schemes in Canterbury and Hawkes Bay are also generating interest in those regions."
Grazing properties accounted for the largest number of sales with 44.1% share of all sales over the three months to July, dairy properties accounted for 10.7%, finishing properties accounted for 24.9% and horticulture properties accounted for 8.9% of all sales. These four property types accounted for 88.6% of all sales during the three months ended July 2013.
