Farm sales remain sluggish with the Real Estate Institute of NZ recording 380 farm sales in the three months ended May, down 14.2% compared to the same period of last year.
In the 12 months to May, 1409 farms were sold, down 3.1% compared to the previous 12 months, with the biggest fall occurring in dairy farm sales which were down 34.2% on the previous year, followed by finishing farms down 13.8% and arable farms down 6.7%. In contrast sales of grazing properties were up 26.3% on the previous year.
Prices also appeared weaker with the median price per hectare coming in at $22,244 in the three months to May, down 15.2% compared to the same period of last year. However the REINZ All Farm Price Index, which adjusts for differences in the mix of farms by size, type and location, was up 0.2% compared to a year ago.
Dairy farm prices were particularly weak, with the average price per hectare of dairy farms sold in the three months to May ($31,248) down 13% compared to a year earlier, while the REINZ Dairy Farm Price Index, which adjusts for differences in the mix of farms by location and size was down 3.7% on a year earlier.
REINZ's rural spokesman Brian Peacocke described an air of smouldering discontent hanging over the rural property market.
"On the rural front, discontent smoulders strongly in a number of regions, fanned particularly by the ongoing emergence of evidence of sales of good pastoral land to forestry interests, this activity being aided and abetted by the Overseas Investment Office providing an environment conducive to investment from offshore interests," he said.
"This factor, coupled with the inexorable grind of the full range of compliance issues and an evident hardening of lending criteria from within the banking sector, is adding to a mood of widespread concern and caution within the rural sector.
"Product prices continue on a solid note, albeit volatility in prices being paid under the Global Dairy Trade auction system, plus the diminishing value of Fonterra shares, is causing farmers and financiers alike to gauge and reassess budgets and equity situations within the dairy industry," he said.
Sales of lifestyle blocks were also down, with 1934 lifestyle properties selling in the three months to May, down 9.2% compared to the same period of last year.
In the 12 months to May, 6870 lifestyle properties were sold, down 5.8% on the previous 12 months.
However lifestyle prices remained firm, with a median price of $690,000 in the three months to May being up 2.2% compared to a year earlier and equal to the previous all time high.