18 Jul 2017

'Quietening off' in farm sales continues

6:42 am on 18 July 2017

Thirteen fewer farms were sold for the three months ending June compared to the year before, Real Estate Institute of New Zealand (REINZ) figures show.

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Photo: RNZ / Rebekah Parsons-King

Rural spokesperson Brian Peacocke said the median price per hectare for all farms sold fell slightly. However, the institute's farm price index, which takes into account differences in farm size, location and farming type, rose by 4.9 percent.

He put the softening in the rural real estate market down to the time of year.

"We're right in the middle of the wintering programme for both dairy and sheep and beef. This is a time of year when they are preoccupied with those activities.

"Calving is getting into full swing now and lambing in some areas, so traditionally you don't get much activity in farm sales at this time of year."

Mr Peacocke said it was hard to pinpoint why there were 13 fewer sales this year than in 2016.

"We've had a quietening off up until now because there has been a much lower level of income through the dairy industry... It's just starting to lift after what's been a significant downturn for the past couple of years.

"We'll see some stronger activity I'm sure as we get into the spring and next season."

Eight regions had an increases in sales volume for the three months ended June 2017 compared to the three months ended June 2016.

Otago led the pack with 13 more sales than last year, followed by Gisborne and Southland.

The kiwifruit sector was still leading the way for horticulture, said Mr Peacocke.

"Some hugely strong sales in kiwifruit, that's making people question where that is heading at the moment.

"There's not a lot of activity in sales in pipfruit or the horticulture sector at the moment but still a lot of confidence surrounding those sides of things."

The median price per hectare for finishing farms has risen 6.5 percent in the past year, and the category accounts for the largest number of sales, with a 38 percent share of all farm sales in the three months to June 2017.

Mr Peacocke said Canterbury had strong sales figures for finishing properties, where cattle are brought to prime condition for slaughter.

"That just goes to show that irrespective of where the dairy sector is at at any given time, the finishing sector is always very strong and there is constant demand for good quality properties."