Rural property market finished last year in a slump

Sales of both farms and lifestyle blocks were well down in Q4 2022 compared to a year earlier

Property / news

Sales of both farms and lifestyle blocks were well down in Q4 2022 compared to a year earlier

27th Jan 23, 9:03am by Greg Ninness

The rural property market finished last year on a downbeat note with sales of both farms and lifestyle blocks well down compared to a year earlier.

The latest rural sales figures from the Real Estate Institute of NZ show that 353 farms of all types were sold in the fourth quarter of last year, down 32% compared to Q4 2021.

The slump in sales was across all farm types, with dairy farm sales down 15% compared to Q4 2021, dairy support properties -19%, grazing properties -16%, finishing farms -14% and arable farms -19%.

The median price per hectare across all farm types was down 5.8% compared to a year earlier.

REINZ rural spokesman Shane O'Brien said unseasonal weather had reduced the number of farms being listed for sale.

"The lower number of sales for the last quarter of 2022 when compared to 2021 may well be explained by a lower number of listings in many regions.

"A late spring and a wet October across a number of regions saw a delay in the release of many listings, with a healthy number of farms under offer but not sold at year end," he said

Sales of lifestyle blocks were even harder to come by, with 1272 lifestyle sales in Q4 2022, down a whopping 43.5% on the same period of last year.

Prices were also softer, with prices for farmlet lifestyle blocks in Q4 2022 down by $90,000 (-7%) compared to a year earlier, while the median price for bare land lifestyle blocks was down by $20,000 (-4.2%) compared to a year earlier.

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14 Comments

by Whatwillhappen | 27th Jan 23, 9:26am 1674764794

Sounds right re life sentence blocks. There's a couple of them near us that have algae growing on the north facing signs they've been up for so long.

by HW2 | 27th Jan 23, 2:56pm 1674784576

Hit them with a lowball

by Spiceeh | 28th Jan 23, 3:09am 1674828576

I can tell you why, the price p/ha and the current interest rates.

I started looking for a farm(let) in 2019, when grazing land was around $9k p/ha, now it's $13k. 4k p/ha or 40+% growth in three years...but in actual fact the agents and land owners won't accept any less than horticultural land prices for even the smallest bare land lifestyle block, for even the lowest productive quality out in no mans land. It's insane and tells you exactly why food prices are through the roof. It's less about 'inputs' and more about 'outgoings' to the banks IMHO. Only corporation's, hedge funds and the super rich, who can negotiate to borrow at mates rates have been able to keep buying and out competing each other for farm land at these prices. They gets mates fixed rates for years longer than the average Joe can negotiate also. Every other small farmer is sitting on ridiculous mortgages for the piddly return they get from the (super)markets.

by onlooker | 27th Jan 23, 11:33am 1674772405

The median price per hectare across all farm types was down 5.8% compared to a year earlier.

Prices were also softer, with prices for farmlet lifestyle blocks in Q4 2022 down by $90,000 (-7%) compared to a year earlier, while the median price for bare land lifestyle blocks was down by $20,000 (-4.2%) compared to a year earlier.

Prices down between 4.2% to 7% - very mild compared to the residential sector. I know very little about these types of properties - has their value been 'protected' a bit from the types of falls in the residential sector, due to the comparative 'productivity potential' of the land?

by HW2 | 27th Jan 23, 3:05pm 1674785119

Productivity potential

It depends where it is and how it is used. There is a certain highly rated radio host, still on annual leave, who lives on about 4 hectares. I believe they just mow the grass and don't do much else.

by Don m | 27th Jan 23, 12:34pm 1674776087

Upwards of 5000 ha sold within 20km of my farm(lower NI east coast) just prior to xmas(about 5 farms)

All going into pine trees (some waiting for overseas investment approval).

est. price around $15-20k/ha . 5 years ago would have been about $5k /ha.

Nash and O'Conner say they are looking into it... sure they are...

I guess the trendies can check the carbon box and feel good about themselves next time they fly Air NZ.

as for the rest of us...last one left close the gate

by IT GUY | 27th Jan 23, 1:22pm 1674778925

At least there will be no family succession planning, its a good out for some famillies.

I am very sad about this transition, look at that Gisbourne beach the young boy was killed at, very sad.

The lack of lifestyle blocks selling is just a reflection of the lower sales rate in nearby cities. LSB are not a FHBer choice, you need capital. One of my good friends calls the DeathStyle blocks. You do have to do A LOT of work on them. you better be proficient at plumbing, fencing, drainage etc or IMHO do not go there.

by Hamish | 27th Jan 23, 2:27pm 1674782845

My mother in law said to me, if you're going to buy 4 sheep, you may as well buy 4,000 of them.

by HW2 | 27th Jan 23, 3:09pm 1674785355

Instead of owning a motor mower you own sheep or cattle. You feed them so that oneday they feed you. Works well.

by Spiceeh | 28th Jan 23, 2:48am 1674827315

The future without a lifestyle block is a death block in the suburbs. When there is no food in the shopping centres those on the land will be swimming in the stuff AND auctioning the excess off for gold and silver to the highest bidder.

by Jethro | 27th Jan 23, 1:20pm 1674778859

The REINZ report sums it up better than "Slump" - at least for lifestyle blocks:-

"Lower listings mean lower sales"

Ratio of sold to listings could give a clearer picture - maybe with some speculation on why owners are not listing.

by Gummy Bear Hero | 27th Jan 23, 1:41pm 1674780081

Given 5 years of constant pummeling by Ardern's government , I am not surprised one bit that farm sales & prices are down ... it's amazing how resilient the cockies have been ...

... 2023 is the year to declare war upon the Labour government : do whatever you can to boot these insanely incompetent sad sacks into the silage pit of history .

by Zen20 | 27th Jan 23, 2:17pm 1674782226

Pinus Radiata is evil, unless you have a papa hilled extreme exercise block to offload

by HW2 | 27th Jan 23, 4:34pm 1674790450

Buy 6.1 hectare in õrr-rewa

A cool 8.27 to 10.4 mill

Not bad buying if you've just scooped the powerball