Farm sales still dry in March, rise slightly from February

A total of 83 farms sold nationwide in March, up from 75 in February but still down from 250 in March 2008 and 234 in 2007, data released by the Real Estate Institute of New Zealand (REINZ) shows. The March sales figure was 68% below the average March figure for the past four years. Dairy farm sales led the rise from February, up 13 to 20 sales, but down from 52 in March 2008. Grazing farm sales rose slightly, up to 35 from 33 (March 2008: 123). "With the small turnover in dairy farms it's not realistic to state with total assurance the market has turned around," REINZ rural spokesman Peter McDonald said. "But there are certainly signs of renewed interest in rural real estate and that's great to see," he said. McDonald pointed to an increase in the number of lifestyle properties sold in the three months to March (1,041) compared to the three months to February (877). This was still down from 1,484 in the three months to March 2008 and 2,048 in the same period in 2007. "(L)ifestyle properties have performed comparatively well throughout the tougher months of recent times, but this month the better news is also shared by the traditional farming real estate market," McDonald said. "We're now seeing the market adjusting to the affordable and sustainable levels we saw in the same period in 2007 before the unrealistic spike in 2008 caused by the high Fonterra payout," he said. In Canterbury, there were a total of nine farm sales in March, down from 12 in February, 39 in March 2008 and 31 in March 2007. Taranaki sales rose from six to 13 (20 in March 2008; 17 in 2007), and sales in the Waikato stayed steady at nine, still well down from 39 last year, and 30 in 2007. The median sale price for farms in the three months to March was NZ$1.175 million, down from NZ$1.263 in the three months to February and NZ$1.685 million in March 2008. The median price for the period to March 2007 was NZ$1.195 million. However, with such a low sales figure in 2009 coupled with the widely variant types of farms that are sold, the median number is not as good an indicator of farm prices as when sales figures were much higher in preceding years. REINZ rural sales figures are for the three months to March, while interest.co.nz calculates the total number of farm sales (type and region) for each individual month.