Dairy farm prices declined in June but lifestyle block sales are on a roll - REINZ

Dairy farm prices declined in June but lifestyle block sales are on a roll - REINZ

The REINZ Dairy Farm Price Index declined 5.5% in the three months to June compared to the three months to May, but was down just 0.3% compared to June 2014.

The REINZ's All Farm Price Index, which tracks changes in the price of all types of farming properties, was also down but by much less, declining 2.6% in the three months to June compared to the three months to May and was up by 0.9% compared to a year earlier.

Both indices adjust sales prices to make allowances for differences in farm size and location.

The number of sales was also down, according to the REINZ,with 479 farms (of all types) selling in the three months to June, compared to 502 in the three months to May and 541 in the three months to June last year.

There were 64 dairy farm sales in the three months to June compared to 87 in the three months to May and 69 in the three months to June last year.

The number of grazing properties also declined, with 201 selling in the three months to June compared to 215 in the three months to May and 233 in the three months to June last year.

However the number of horticultural properties changing hands continues to rise, with 76 selling in the three months to June compared with 70 in the three months to May and 57 in the three months to June last year.

"The rural market continues to maintain reasonable momentum as farmers grapple with the volatile mix of winter conditions and tighter cash flows," REINZ rural spokesman Brian Peacocke said.

"The current level of the New Zealand dollar and the outlook for interest rates are two of the brighter spots on the horizon."

The number of lifestyle blocks being sold remains well up on previous years, with 2079 selling in the three months to June which was the highest number of sales in any three month period since May 2007, according to the REINZ.

That was little changed form the 2063 that sold in the three months to May this year but up 32.5% compared to the 1569 that sold in the year to June last year.

Auckland accounted for more than a quarter of all lifestyle block sales, with 550 selling within the region in the three months to June, compared with 573 in the three months to May and 359 in the three months to June last year.

Click on the following link to read the REINZ's full rural sales release for June:

PDF iconREINZ Rural Press Release - June 2015.pdf

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

3 Comments

Comment Filter

Highlight new comments in the last hr(s).

wait a year, dairy farm prices could halve the way milk prices keep falling.

As someone on the frontline re farm sales I doubt values will halve, but.... they will drop, what usually happens in this type of cycle is that farmers just batten down the hatches, put the chequebook away and just hangin there. Those with excessive debt will have the hard word put on them by the bank, and a few will exit but this is usually done in a discreet manner. Most banks don't want to be seen to mortgagee a farmer as its bad for business, that said, the odd exception may need this treatment. I think, rather than a plunge in land values, what will happen is that just very few farms will be sold, this will tend to hold the values. Therefore supply and demand sets in, time will tell.

what happened after the gfc ,?