31 Jul 2012

Institute to new measure for farm sale prices

9:49 am on 31 July 2012

The Real Estate Institute is to begin using a new way to gauge changes in underlying farm sale prices.

The measure, been developed in conjunction with the Reserve Bank, adjusts farm prices to account for location, size and farm type.

The Farm Price Index will also take into consideration interest rates, commodity prices, exchange rates and farm costs, which the institute says can make up a third of the price trend movement.

The index will start being used this week.

The institute will keep its median price per hectare measure each month as a guide, to assess the initial value of properties.