17 Sep 2020

Rural property market sales rebound

3:25 pm on 17 September 2020

The Real Estate Institute thinks the resilience primary industries have shown during the Covid-19 pandemic has helped boost confidence in the sector.

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Photo: RNZ / Richard Tindiller

New figures show there were 121 more farm sales for the three months ended August compared to the same period last year - a lift of nearly 46 percent.

Moving from quarterly to annual figures, sales for the year to August are still down - 7 percent in volume terms - but that was a notable improvement from earlier in the year where the number was 20 percent.

The institute's rural spokesperson, Brian Peacocke, said grazing and finishing farms had helped drive the rebound, accounting for more than 60 percent of sales.

"So as to what's driving it, I think there's an increasing awareness that there's strength in the rural economy, as opposed to other sectors of the economy which have been exposed to being a bit brittle under the Covid impacts."

Banks tightening up on lending, as they moved to dramatically reduce their exposure to the sector had been impacting farm sales, but there were some indications this was starting to ease slightly he said.

"There's only hints of that at the moment, it's yet to come into evidence but there's just a fairly solid feeling of quiet confidence I think in the rural sector currently."

Bayleys chief operating officer and rural real estate director Duncan Ross said getting funding from the banks was still tough, but the strength the sector had shown during the Covid crisis and the good returns farmers were achieving did seem to be helping sales.

"You know we came through that initial lockdown period and that sort of shut people out of the farmgate so to speak ... since then we've seen the realty market really take off and the rural market obviously off the back of the confidence [provided] in the fact that the sector carried on through the lockdown period."

PGG Wrightson general manager for rural real estate Peter Newbold said he expected business to continue to build over the next few months.

"If you look at the rural market it has been, I guess flat-lining and in a low patch for a number of years, Covid has created a different market place ... people are looking for a place to invest."

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