February real estate activity 'cautious'

REINZ says a drop in farm sales last month was largely due to higher interest rates, government uncertainty and rising farm input costs.

There were 155 fewer farm sales, down 33.7% for the three months ended February 2023 when compared to the three months ended February 2022.

Overall, there were 305 farm sales in the year to February 2023, 457 fewer than the number sold in the year to February 2022.

The median price per hectare for all farms sold in the three months to February 2023 was $31,830 compared to $29,990 recorded for the three months ended February 2022. This marked a 6.1% increase on last year’s numbers but a 2.9% decrease compared to January 2023.

REINZ rural spokesman, Shane O’Brien, says the lower sales volumes follow a lower than normal number of listings during summer and early autumn.

“However, the recorded sales are still at strong levels and comparable to 12 months earlier particularly for well developed farm properties,” O’Brien says.

“The recent land grab for forestry seems to have slowed in most areas. Buyer demand is still being noticed in the horticultural and viticultural areas with recent events in Hawke’s Bay possibly impacting buyer decisions in the short to medium term.”

O’Brien says buyers are mindful of market conditions as the country heads into an election year.

“The gloomy outlook for farm product prices this season and inflation affecting farm operating costs are squeezing profitability margins and debt servicing ability for farmers,” he says.

“While buyers are still present in all markets, they are being very considered in their buying decisions.”