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.
Recent data from REINZ reveals a 35.9% drop in farm sales for the three months ended October 2022 compared to the same period last year.
Overall, there were 173 farm sales in the three months ended October 2022, the same number as in September 2022. Comparatively, in the three months ending October 2021, there were 270 farm sales.
1,501 farms have been sold in the year to October 2022, 284 fewer than in the year to October 2021.
There were 7.2% fewer dairy farms, 20.4% fewer dairy support, 16% fewer grazing farms, 13.2% fewer finishing farms and the same number of arable farms sold over the same period.
The median price per hectare for all farms sold in the three months to October 2022 was $25,270 compared to $31,360 recorded for three months ended October 2021, down 19.4%.
The median price per hectare increased by 9.8% compared to September 2022.
Brian Peacocke, rural spokesman at REINZ, says the sales data confirms a levelling out of farm sales after the 53% drop reported last month.
“Of particular interest currently will be the uptake of rural property during the month of November, given reports of the high number of farms currently on the market.
“Just what is triggering this large surge of properties for sale is yet to play out, but this fact - combined with the previously referred to 53% reduction in sales last month compared to similar periods over the last two years – indicates some concerning trend in the rural sector,” Peacocke says.
“Tension in the farming ranks is palpable; discontent with central Government policies is intense; frustration regarding inexorable cost increases is a dark cloud, and given the recent profits recently announced by the banking sector followed by spiralling interest rates, accusations of price-gouging by the trading banks are now emerging.”
Peacocke says that given the market-related signals reflect an easing in price levels for beef, lamb and dairy, the cautious mood within the rural sector is sobering.
“Land values will inevitably come under scrutiny, particularly for the range of properties other than those considered, by virtue of location, contour and a high standard of improvements, to be at the top end of the quality range.
“On the positive side, extended periods of rain over much of the country is providing great conditions for spring grass growth and crop emergence, which is really pleasing for those on the land,” he concludes.
