Farm sales down a third compared to a year ago, lifestyle block sales down 42%

The rural property slump continued in February with sales of farms and lifestyle blocks both substantially down compared to previous years.

According to the latest rural sales data from the Real Estate Institute of New Zealand (REINZ),1023 lifestyle blocks were sold in the three months ending February this year, down 42% compared to the same period a year earlier.

The decline in sales was nationwide with all regions recording a decline in sales compared to a year earlier.

Prices were also weaker, with the median selling price for the three months to February this year coming in at $949,000, down 7.9% (-$81,000) compared to a year earlier.

The median price for lifestyle blocks was also $91,000 lower (-8.7%) than for the three months to the end of January this year.

The median price for bare land lifestyle blocks was $400,000, down by $50,000 (-11%) compared to three months ended January, and down by $80,000 (-17%) compared to 12 months earlier.

The median price for farmlet blocks over the three months to February this year was $1.1m, down by $75,000 (-6%) compared to the three months to January, and down by $190,000 (-15%) compared to the three months to February last year.

"The increase in interest rates has undoubtedly impacted buyer decisions and the reported slowing of the residential market could limit the buyer pool for lifestyle properties across New Zealand," REINZ rural spokesman Shane O'Brien said.

Farm sales have also been significantly affected by the slump.

The REINZ recorded 305 farms sales of all types over the three months to the end of February this year, down 15% compared to the three months ended January, and down 34% comparted to a year earlier.

The slump in sales affected all farm types with dairy farm sales down 35% compared to a year earlier, finishing farm sales down 44%, grazing properties -17% and horticultural property sales down 61%.

The REINZ All Farm Price Index was down 2.5% at the end of February compared to a year earlier, while the REINZ Dairy Farm Price Index was up 12.3% over the same period.

"Buyers are being very mindful of market conditions as we head into an election year," O'Brien said.

"The gloomy outlook for farm product prices this season and inflation affecting farm operating costs are squeezing profitability margins and debt servicing ability for farmers."

"While buyers are still present in all markets, they are being very considered in their buying decisions," he said.

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