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Farm sales hit by OIO hurdles doubt

Rural News
Farm sales hit by OIO hurdles doubt

The rural property market needs kick starting into life and the OIO 's slowness with a decision in the Crafar deal is not helping.

 With many farmers superannuation fund tied up only in their properties, few are keen, or can afford to quit, in this quiet shaky market.

Commodity product prices are strong at present and are predicted to be firm for a year or two yet, so some farmers are opting to sit out this quiet market and wait for the inevitable turn around.

Banks also will not be keen to "rattle the rural property cage" as they have a large investment in this sector. Instead it appears they are quietly tightening the rural debt rules endeavouring to reduce their and the clients exposure.

Farmers are well used to living on tight budgets, and will do so until things improve.

Uncertainty over foreign land deals is thought to be weighing heavily on efforts to sell a group of dairy farms in the central North Island.Twenty-nine "designer" dairy farms created by Carter Holt Harvey around Tokoroa have been sitting on the market since early this year. But Bayleys agent Mike Fraser-Jones said interested parties are waiting for the outcome of the Crafar farms deal to set the tone on foreign farm ownership.

The Crafar farms, now in receivership, are subject to an Overseas Investment Office decision on whether Hong Kong-backed Natural Dairy consortium can complete the purchase reports Stuff. The 16-farm deal is controversial because of the backers' anonymity and the financial troubles of business associate May Wang. Two months ago, the Serious Fraud Office said it was investigating the deal.

Stephen Franks, a company law expert and former ACT list MP, said uncertainty would remain in the area of foreign land sales until the Government removed the element of political "second guessing" involved. Mr Franks said the OIO used to have a "very clear set of criteria administered outside the political process" but appeared to be moving towards the political Australian model, and rural land reflected the uncertainty.

But John Larmer, a Taranaki-based farm valuer with Telfer Young, said farm sales all over the country were low, as even locals put purchase plans on hold. ' I think they're not in a space to make that decision as they're dealing daily with the effects of the drought or their low lamb drop." Prices "are not actually weakening, the deals are just not happening."

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