Farm sales in New Zealand remained weak in April, despite a slight pick up from the previous three months, data from the Real Estate Institute of New Zealand (REINZ) showed. (Update 1 includes a further look at median sale prices) There were 108 farm sales nationwide over the month, up from 83 in March. However, sales were weak compared to previous April months, down 59% from 2008 and 51% below the April average for the past 4 years. The lowest figure in that period was 177 sales recorded in April 2006. REINZ rural spokesman Peter MacDonald said that the increased turnover was "a really good sign." However, he noted that the figures were "quite quiet compared to what normally would be expected in April." Dairy farm sales stayed the same in April from March at 20, still down from the 54 in April 2008 and 35 in 2007. The last month that experienced more than 20 dairy farm sales was July in 2008. Looking at the year ended April 2009, there were 1,562 farm sales nationwide. This compared to 2,769 in the April 2008 year and 2,203 the year before. Sales in the April 2009 year were 39% below the average of the previous five April years. The median farm sale price in the three months to April was NZ$1.042 million, down from NZ$1.175 million in March and NZ$1.81 million in April 2008, a fall of 42% over the year. The median price in the three months to April was the lowest since November 2006, from when, it has constantly been above NZ$1 million. The median sale price saw a big jump in November 2007 and remained around NZ$1.8 million until it began to fall from August 2008 to where it is now. The low farm sales figures come as Reserve Bank data shows that by the end of March, the amount of outstanding agricredit had grown at over 20% year-on-year for each month since May 2008. This week, the Reserve Bank warned banks they should be careful about lending too much to the farming sector because there was a a risk of a significant fall in land prices. "Credit exposures are...significant in the agricultural sector, particularly given the recent rapid growth in rural lending and the sharp decline in farm incomes during the 2008/9 season compared with a year earlier," the RBNZ said in its latest Financial Stability Report. Dairy farms are currently facing a Fonterra payout of NZ$5.20 per kg of milk solids in the 2008/09 season, down from a record NZ$7.66 in the 2007/08 season. However Fonterra noted recently that if the eventual payout were to be higher than NZ$5.20, farmers should expect some level of retentions by the dairy giant. The median dairy farm price crossed the NZ$4 million barrier at the beginning of 2008 (after being below NZ$3 million in January 2007) and the trend is now of a downward fall from the second half of 2008. Although the low sales figures can distort the median price, the April 2009 median price for a dairy farm was the lowest since October 2007. "Some more highly leveraged farms, notably in the dairy sector, are having difficulty in servicing debt, despite recent declines in interest rates, and there is evidence of increased use of overdraft facilities earlier in the year than is typically the case. Rural land prices are also likely to come under increasing pressure through the remainder of 2009, with the market for farm sales currently very thin," the RBNZ said. "(T)he distribution of agricultural debt is highly skewed across the sector, with indebtedness generally greatest among dairy farms, especially new entrants to the industry and farms that have expanded through leveraged land purchases in recent years. Fluctuations in rural incomes, which influence land prices and lending growth with varying lags, are a key source of risk to both borrowers and lenders in the sector."