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.
In the three months to the end of November 315 farms sold, nearly double the 170 sold in the same period last year and comfortably ahead of 2009’s 223 sales spanning the same period.
Median price/hectare was $20,445, back 2% on the September-November median last year and 3.7% behind the 2009 equivalent.
REINZ Rural Market Spokesman Brian Peacocke says excellent spring growing conditions, favourable product prices, low interest rates and good banking support have created an ideal climate for land transactions.
“However, despite these positive factors, buyers remain quite selective in their purchase decisions,” he adds.
Dairy farm prices show a noticeable lift with some over $50,000/ha in Canterbury and $55,000/ha in Waikato, including Fonterra shares. The dairy median, at $36,766/ha, is comfortably ahead of 2009 median of $33,318/ha for the comparable period, and 2010’s $29,668/ha.
Sales in November included 18 dairy farms at an average of $35,871/ha, with an average farm size of 144ha, ranging from 52ha in Taranaki to 323ha in Canterbury. Average production across all dairy farms sold in November 2011 was 1,034kgMS/ha.
Grazing properties accounted for the largest number of sales with 59.4% share of all sales over the three months. Finishing properties accounted for 13.0%, Dairy properties 8.6%, and Horticulture properties 7.9%. These four property types accounted for 88.9% of all sales during the three months ended November 2011.
For the three months ended November 2011 the median sales price per hectare for dairy farms was $36,766 (27 properties), compared to $29,668 for the three months ended October 2011 (17 properties), and $26,590 (14 properties) for the three months ended November 2010. The median dairy farm size for the three months ended November 2011 was 122 hectares.
For the three months ended November 2011 the median sales price per hectare for finishing farms was $20,445 (41 properties) compared to $18,847 for the three months ended October 2011 (43 properties), and $13,368 (13 properties) for the three months ended November 2010. The median finishing farm size for the three months ended November 2011 was 100 hectares.
For the three months ended November 2011 the median sales price per hectare for grazing farms was $16,591 (187 properties) compared to $16,013 for the three months ended October 2011 (168 properties), and $14,071 (90 properties) for the three months ended November 2010. The median grazing farm size for the three months ended November 2011 was 65 hectares.
For the three months ended November 2011 the median sales price per hectare for horticulture farms was $106,471 (25 properties) compared to $84,960 (22 properties) for the three months ended October 2011, and $161,757 (34 properties) for the three months ended November 2010. The median horticulture farm size for the three months ended November 2011 was seven hectares.
The lifestyle property market also saw a modest increase in the number of sales in the three months to November 2011 compared to the three months to October 2011. 1,222 sales were recorded in the three months to November, up 25 (+2.1%) on the three months to October 2011, and up 146 (+13.6%) compared to the three months to November 2010.
Eight regions recorded increases in sales compared to October while five recorded falls. Nelson recorded the largest increase (+15 sales), followed by Auckland (+14 sales) and Hawkes Bay (+11 sales), followed by Northland (+6 sales) and Waikato (+4 sales). Wellington recorded the largest drop (-20 sales), followed by Taranaki (-6 sales) and Southland (-4 sales).
The national median price for lifestyle blocks rose by $15,000 from $435,000 for the three months to October to $450,000 for the three months to November. Compared to three months to November 2010 the median price increased by $18,250.
“We are seeing some improving trends in the lifestyle property market, with rising sales and prices across many regions,” says Peacocke.
“Canterbury has been the stand out performer with 72% more sales in the three months to November this year compared to three months to November last year.”
