The number of farms being sold might be well down on last year but prices are higher, the Real Estate Institute of New Zealand says

The number of farms being sold might be well down on last year but prices are higher, the Real Estate Institute of New Zealand says

The number of farms being sold is well down on last year but prices are higher.

The Real Estate Institute of New Zealand (REINZ) recorded 265 farm sales in the three months to the end of August, down 18% on the same period of last year.

Conversely the REINZ All Farm Price Index, which adjusts for differences in the mix of farms sold by size, type and location, was up 4.4% compared to a year ago.

Perhaps surprisingly, prices for dairy farms were up by even more, with the REINZ Dairy Farm Price Index up 8.0% year-on-year.

On an annual basis, 1349 farms of all types were sold in the year to August, which was down 7.9% on the previous 12 months.

The biggest decline was in the dairy sector with dairy farm sales down by 38.2% in the year to August compared to a year earlier, followed by Arable farms -13.7%, finishing farms -8.6% and grazing farms -1.1%.

The median price per hectare for all farms sold in the three months to August was $25,346, up 28.1% compared to the same period of last year.

"Beef, lamb and venison prices continue at strong levels, albeit venison is easing currently, horticulture looks set for another bonanza, and the dairy processors claim a solid level of pricing for the 2019/20 season," REINZ rural spokesman Brian Peacocke said.

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Farm sales

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I'm hearing of neighbours, or close by farmers, being directly approached by banks to buy impaired farms, more commonly now than in the past.

So these sales, if carried through, might not go through RE agents and not be counted thereby?

Correct Waymad. They are not going through real estate agents and are therefore making the transaction potentially cheaper for both parties - buyers and sellers.

The banks are going to pick winners and losers as they reorganise their lending portfolios.
There are a number of farmers who have been cash neutral for years now getting tired of peddling on the spot and with no capital gains for the foreseeable future their enthusiasm to stay is disappearing.