June farm sales up year-on-year but median price per hectare at 7-year low, REINZ says

A total of 111 farms changed hands last month, 30 more than in June last year, according to the Real Estate Institute of New Zealand (REINZ), with nearly half the sales coming in Canterbury, Otago and Southland. However, REINZ says the median price per hectare is now at its lowest level since July 2004.

The June sales included 13 dairy farms and 59 grazing properties and compares with the 81 farms that changed hands in June 2010, 80 in June 2009, 216 in June 2008, 212 in June 2007 and 158 in June 2006.

REINZ rural market spokesman Brian Peacocke said the number of farm sales for the year ended June 30 was 960, 29 higher than in the year to June 2010 and 30 more than in the year to May 2011. A turn around  in sales volumes that started in April had continued, although the rate of increase had slowed with the arrival of winter.

“Most of the sales activity was in the grazing, dairy support and finishing sectors in the South Island with Southland again recording the largest number of sales," Peacocke said.

“We are seeing a noticeable increase in enquiry from purchasers targeting potential transactions in the spring, as well as an increase in the number of appraisals being done for sellers. The overall increase in activity from both buyers and sellers is being matched by a reinvigoration of interest in rural lending coming through from the banking sector,” Peacocke added.

Strongest sales volumes in the south; Median price per hectare at 7-year low

During June 16 farms were sold in Canterbury and 17 in each of Otago and Southland. This continues a recent trend of the strongest sales volumes coming in the three southern provinces, with 45 of 130 sales coming from the three regions in May, 70 of 152 in April and 35 of 82 in March.

For the three months to June, REINZ said there were 393 farm sales compared with 364 sales in the three months to May 2011 and 302 sales in the three months to June 2010. The median price per hectare for all farms sold in the three months to June this year was NZ$15,568, down from NZ$17,199 in the three months to May 2011 and NZ$17,772 for the June 2010 quarter.

"The median price per hectare is now at its lowest point since July 2004 and continues the downward trend in median prices evident since early 2009," Peacocke said.

"The easing of farm prices, as shown by the median price data has now brought farm prices more into line with the long term underlying trend."

 The 13 dairy farms sold in June fetched an average price of NZ$24,081 per hectare and NZ$35 per kg of milk solids. The average farm size was 192 hectares with a range of 27 hectares in the Waikato to 541 hectares on the West Coast.

REINZ said in the three months to June 2011 the median sales price per hectare for dairy farms was down to NZ$30,828 from 58 sales from NZ$32,609 from 31 properties in the three months to June 2010.

See REINZ's full press release here and see its rural market statistics here.