Farm sales reach record low as finance becomes scarce
14th Nov 08, 3:15pm
Limited availability of finance due to tighter credit restrictions led the total monthly amount of farm sales in New Zealand to reach a record low in October. There were 114 farms of all types sold during the month, with the previous low being 126 in September 2006. Interest.co.nz began recording monthly totals of farm sales in early 2003. The Real Estate Institute of New Zealand (REINZ) Rural Market Report said that the median sale price of farms also dropped. In the three months to the end of October, the median price fell to NZ$1.5 million from NZ$1.67 million during the three months to September. The national median price in the three months to October 2007 was NZ$1.3 million. "There have been plenty of enquiries for good properties. The only limiting factor is the availability of finance," REINZ spokesman Peter McDonald said. "We're seeing a lot more offers made conditional on finance and that's not possible in an auction situation where funds need to be immediately available," McDonald said. The total amount of sales in October 2008 was 35% less than the average of the last four October months. Dairy farm sales in October rose slightly from September, to 15 from 13. Finishing farm sales (14 from 11) and forestry farm sales (5 from 2) also rose. Sales of grazing farms fell to 67 from 75, while horticultural farm sales fell to 6 from 13. Regionally, there were no farm sales on the West Coast of the South Island for the second month in a row. The two regions with the most overall sales were Waikato (18 from 16 in September) and Canterbury (18 from 21). The region with the largest fall in sales volumes was Southland, where 15 farms sold in October compared with 24 in September. Median sale prices rose in the three months to October from the three months to September in Auckland, Gisbourne, Taranaki, and Canterbury. The median sale price for lifestyle blocks in the three months to October also fell, down to NZ$425,278 from NZ$435,000 in the three months to September. Sales volumes also fell slightly in the three months, to 1,054 from 1,071.