Farm sales are dropping but the rural real estate market remains reasonably solid, according to the Real Estate Institute of New Zealand (REINZ).
Overall, there were 403 farm sales in the three months ended May 2022, compared to 450 farm sales for the three months ended April 2022, and 453 farm sales for the three months ended May 2021.
1,697 farms were sold in the year to May 2022, 130 fewer than were sold in the year to May 2021, with 11.9% more Dairy farms, 33.6% fewer Dairy Support, 12.9% fewer Grazing farms, 4.1% fewer Finishing farms and 15.2% fewer Arable farms sold over the same period.
The median price per hectare for all farms sold in the three months to May 2022 was $29,760 compared to $28,190 recorded for three months ended May 2021.
The median price per hectare increased 3.9% compared to April 2022.
Four regions recorded an increase in the number of farm sales for the three months ended May 2022 compared to the three months ended May 2021, with the most notable being Southland and West Coast, with 13 and five more sales respectively.
Northland, down 19 sales, and Waikato, down 18 sales, recorded the biggest decreases in sales.
Brian Peacocke, rural spokesman at REINZ, says the sales data for the three-month period ending May 2022 reflects an 11% easing in sales volumes from the previous three-month period, and from the equivalent period 12 months ago.
“Categories most impacted were arable, dairy, dairy support and horticulture whereas finishing properties remained resilient with solid growth in sales numbers over the last two years.
“From a climatic perspective, welcome and well-spread rain across the country during the month of May allowed those areas most affected by drought to recover to a level sufficient to provide better levels of pre-winter feed than had been anticipated.”
Peacocke says early snow was a signal for the southern regions that pre-winter feed would be very much needed before spring relief arrives.
“Like most sectors within the New Zealand economy, farming is feeling the full impact of increasing costs, particularly those relating to fuel, fertiliser, general farm inputs and interest rates, with the shortage of labour being a continuing impediment to productivity, particularly in the horticulture sector.
“On a positive note, product prices have been steady, with an expectation of upward pressure on values for beef and lamb, downward pressure on the record prices for dairy products this season, and uncertainty surrounding the reduced volumes of kiwifruit and pip-fruit in the horticultural sector.
“Beyond speculation or debate, or course, is the importance of the agriculture sector to the overall economy,” Peacocke concludes.