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Rural property market volatile with farm and lifestyle block sales well down in Q3 compared to a year ago

Property / news
Rural property market volatile with farm and lifestyle block sales well down in Q3 compared to a year ago
19th Oct 21, 11:55am by Greg Ninness
Dairy cows grazing
Photo: Phillip Capper

The rural property market showed signs of volatility in the third quarter (Q3) of this year, with sales numbers down compared to a year earlier while prices were generally higher.

The number of farms sold throughout New Zealand in the September quarter was down 27.5% compared to the same quarter of last year, according to the Real Estate Institute of NZ.

However the Q3 2021 sale numbers were only slightly below where they were in Q3 2019.

The biggest declines in sales were for arable properties which were down 67% in Q3 2021 compared to Q3 2020. Grazing property sales were down 43% and finishing properties were down 37%.

However dairy farm sales went against the trend and were up a whopping 65% in Q3 2021 compared to Q3 2020.

Prices were generally firmer, with the REINZ All Farm Price Index, which adjusts for differences in the size, location and mix of farms sold, up 13.9% in Q3 2021 compared to Q3 2020.

The REINZ Diary Farm price Index, which adjusts for differences in the size and location of farms sold, was up 10.2% in Q3 2021 compared to Q3 2020.

Lifestyle block sales showed similar trends, with the number of sales well down compared to a year earlier but prices up significantly.

There were 1650 lifestyle block sales in Q3 2021, down 39% compared to Q3 2020, with sales progressively declining throughout the quarter.

There were 1027 lifestyle block sales in July, 525 in August and just 98 in September.

The median selling price for lifestyle blocks increased by $195,000 (+25.8%) to $950,000 over the same period.

For bare land lifestyle blocks, the median price was $490,000 in Q3 2021, up by $90,000 m(+22.5%) compared to a year earlier.

There are more details of September farm sales here.

The comment stream on this story is now closed.

Farm sales

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Source: REINZ
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Lifestyle blocks sold - REINZ

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4 Comments

by  Spiceeh  |  19th Oct 21, 4:11pm 1634613099

Do we have any idea WHY this market is appearing so volatile right now?  Are there any obvious economic trends/indicators that may have created it? I have been watching this market for the past 18 months+ and all of a sudden farm listings are appearing in a bulk dump into the market. This is the first sign of possibly being able to afford to purchase a farm home on a personal/non-investor level.

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by  CWBW  |  19th Oct 21, 7:10pm 1634623856

Perfect recipie for farm land acquisitions- rising land values and inflation putting the heat on farm owners. In addition to the mix is the lucrative ETS gravy. I think there might be rebound in sales volume and conversions to ETS farming soon.

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by  waymad  |  20th Oct 21, 7:16am 1634667394

I can think of three factors contributing here:

  1. Succession....many farmers are of an age where the exit strategy assumes first priority, and passing the farm on to an uninterested family is not an option.
  2. Urban escapees.  Urbanites from the Roman Empire onwards have always wanted a Rural Retreat especially when urban mayhem seems more likely.
  3. As noted above, the twin economic forces of carbon moolah and corporate ownership will alter individual's motives - HODL or sell up becomes a clearer binary choice now that alternatives abound.
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by  General Comment  |  20th Oct 21, 8:03am 1634670213

Same as my thoughts on all three counts.

I'm seeing a few fairly attractive farms turning up around me right now, and while I'm considering buying I'm becoming hesitant with the way the economy is looking. I'm also aware that I'll be competing with corporates carrying a lot more clout than me who would think nothing of throwing a few more hundred thousand at an offer. It's almost at the point I wonder why even bother trying. It's much simpler to farm people in rentals and have a more assured return.

Meanwhile I've had a number of friends come out and visit me then express a desire to find somewhere in the country of their own. It's a life that looks wonderful from the outside but it takes a certain type to be able to stick with it once you have livestock or crops on the land. In my "day job" sitting at a desk I get many notifications from people saying they're taking the day off because they have a cold. These people are not the required type.

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