The rural property market is going through a "significant downturn," according to the Real Estate Institute of New Zealand.
It recorded just 243 farm sales throughout the country over the three months to the end of May this year, down 9.3% compared to the same period of last year, and down 43% compared to the same period of 2022.
On an annual basis, 951 farms of all types were sold over the 12 months to May this year, down 20% compared to the previous 12 months.
The biggest annual decline in sales was for grazing properties -34%, followed by dairy farms -26%, dairy support farms -24% and arable farms -14%.
Prices are also declining, with all farms sold in the three months to May achieving a median price per hectare of $26,915, down 2.8% compared to the same period of last year.
The REINZ All Farm Price Index, which adjusts for differences in the mix of farm sold each month by farm type, size and location, was down 13% in May compared to May last year.
Dairy farm sales recorded a modest annual increase of 1.2% in their median price per hectare which was $35,135 over the three months to May this year. However, that was likely due to a change in the mix of properties sold, because the REINZ Dairy Farm Price index, which adjusts for changes in the mix of farms sold by size and location, was down 17% compared to a year earlier.
That reflected an 18% drop in the price per kilo of milk solids to $30.45.
Finishing farm sales achieved a median price per hectare of $32,830, down 12% for the year, while grazing farms sold for a median price per hectare of $13,880, down 2.6% for the year.
The biggest decline in prices was for horticultural properties, which sold for a median price per hectare of $300,000, down 23% on the same period of last year.
However while farms sales continue to decline, there are signs that lifestyle block sales may be bottoming out after three years of substantial declines.
The REINZ recorded 1449 lifestyle block sales in the three months to May this year, compared to 1386 in the three months to May last year, 1795 in the three months to May 2022 and 2548 in the three months to May 2021.
The median price of all lifestyle blocks sold in the three months to May this year was $1 million, unchanged from a year earlier.
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