The number of farms sold in the three months to the end of June was down 18.9% compared to the same period of last year, according to the Real Estate Institute of NZ.
The REINZ figures show that 261 farms of all types were sold in the three months to June compared to 322 in the three months to June last year.
Dairy farm sales were hit even harder, with 24 sales in the three months to June, down 29% compared to a year earlier.
In the month of June only one diary farm sale was recorded, compared to eight in June last year (see interactive graph below for the monthly trends in farm sales by type of farm).
While the COVID-19 lockdown that was in place for much of April would have contributed to the low number of sales in the second quarter, it was not entirely to blame.
The REINZ figures show that the number of farms being sold has been declining for at least five years.
In the second quarter of 2015, 479 farms of all types were sold.
That declined to 472 in Q2 2016, 459 in 2017, 427 in 2018, 322 in 2019 and 261 in 2020.
Farm prices were also down overall.
The REINZ All Farm Price Index, which adjusts for differences in the mix of farms sold by type, size and location, was down 10.1% in the second quarter of this year compared to the second quarter of last year.
The REINZ Dairy Farm Price Index was down 8.6% compared to a year ago.
"The slide in sales numbers poses a pertinent question. Are numbers going to stabilise at the current level, or is the downward trend going to continue?" REINZ rural spokesman Brian Peacocke said.
"Should it be the latter, given the range of issues currently impacting on the rural sector, not the least being the need for youthful regeneration of the farm ownership structure, it could be that an avalanche of potential sales is building up behind an earthen dam.
"Should the dam burst, what is the likely impact on farm values? Will values increase, stabilise or decrease?
"Irrespective of the outcome, what is clear is that the current average return on investment for those with investment in the rural sector will need to improve or there will be a decreasing incentive for attracting much needed, affordable capital into the rural sector," he said.
You can access all of interest.co.nz's rural data resources by clicking here.