Rural property slump deepened in September

Sales of farms and lifestyle blocks continued their downward slide in September

Rural News / news

Sales of farms and lifestyle blocks continued their downward slide in September

31st Oct 23, 10:24am by Greg Ninness

The rural property slump deepened in September with farm and lifestyle block sales both continuing their downward trajectory.

According to the Real Estate Institute of New Zealand (REINZ), just 151 farms were sold over the three months to the end of September. That's down 21% compared to the same period of last year, and down 16% compared to the three months ended August this year.

Dairy farm sales in the three months ended September were down 22% compared to a year ago, finishing farm sales were down 10%, horticultural property sales were down 21%, and grazing farm sales were down a whopping 44% compared to a year ago.

Farm prices were also softer compared to a year ago with the REINZ All Farm Price Index, which adjusts for differences in the size, type and location of farms sold, down 8.5% compared to September last year.

The REINZ Dairy Farm Price Index was down 6.7% compared to a year ago.

Things weren't much better in the lifestyle market, with 1225 lifestyle blocks sold in the three months to the end of September, down 13% compared to the same period of last year.

In the 12 months to September this year, 5440 lifestyle blocks were sold, down 28% compared to the previous 12 months.

The graphs below show the rolling three monthly sales of both farms and lifestyle blocks for the last three years, clearly showing that sales are following normal seasonal patterns but are trending steadily downwards overall.

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13 Comments

by Yvil | 31st Oct 23, 11:54am 1698706465

A terrible trend for NZ's biggest industry :-(

by redcows1 | 31st Oct 23, 1:03pm 1698710636

Only 6% of GDP. No worries.

Surely the price coming down will make them closer to profitability which is a good thing isn't it.

by macca | 1st Nov 23, 8:23am 1698780202

Agriculture is 80% of our exports. GDP is simply NZ economy playing with itself. Exports actually put overseas money in the tin.

by Murray Falconer | 1st Nov 23, 8:35am 1698780953

Disagree. It's a great thing for those who want to work on their own farm but like many city dwellers have been consigned to renting/working for the landowners. Long may the land price decrease in my view - no significant correlation to the income / exports generated by NZ's biggest industry (unless you're farming for capital gain that is).

by RickStrauss | 1st Nov 23, 10:00am 1698786021

The REINZ Dairy Farm Price Index was down 6.7% compared to a year ago.

Very good news for young farmers, indeed. Positive signs for the next generations, amidst all the doom and gloom of forever pumped and supported property prices in NZ.

by Flying high | 31st Oct 23, 12:00pm 1698706813

The young families who are life-sentence block buyers are constrained by the high interest rates and test rates.

Existing owners know they have to reduce asking prices to buyers levels

Spanish stand-off

by 1689 Baptist | 31st Oct 23, 1:15pm 1698711313

Why would anyone sell a farm unless they really have to? The country's population keeps increasing and we are not making more hectares. We are moving towards a feudalism system in this country.

If you don't want to farm anymore you can always lease it.

by refactornz | 31st Oct 23, 3:26pm 1698719197

Mostly because they want to retire.

by Murray Falconer | 1st Nov 23, 8:41am 1698781289

You start with the assumption that land prices are currently not overvalued. If they are, better to sell now and get a slightly less overvalued price than wait decades for the population to reach xx million to justify the current price. I agree rising population will all else being equal raise competition and price for land which is why I'd like to see immigration slashed.

by Retired-Poppy | 31st Oct 23, 1:27pm 1698712056

While it's certainly sad reading seeing farmers bleeding precious equity and therefore diminished ability to access capital in times of need, the continued slumping of Lifestyle Blocks is very much a bellwether for the upper end of our country's house market in general. Using FHB's and their access to retirement Kiwisaver as a means or predictable method to prevent a full on rout does not have legs. The words "cannon fodder" comes to mind.

Our economy is certainly in decline.

by Jack Lumber | 31st Oct 23, 5:06pm 1698725173

No forest buyers anymore.

No overseas buyers anymore.

Poor hill country farmers now only selling to poor hill country farmers so prices will keep falling until yield and debt costs match, like other businesses. Not many exit plans there. How low will it go?

by Wilco | 2nd Nov 23, 2:26pm 1698888360

Spring marketing campaign first large Northland beef farm auction yesterday. 450ha made $4.5m. Rolling contour well maintained. Purchased by a local beef farmer.

At 400ha eff grass area overseas forestry companies would have paid $6m to $6.5m 12 to 18 months ago. Surrounded on several sides by recently planted pine trees.

Going to help re-set the farm market up here.

by Jack Lumber | 2nd Nov 23, 5:59pm 1698901140

Yep we got offered a very nice block in SNI. Asking 50% below a year or so.

Steady daily stream of farmers coming in the door wanting to sell - bloody horrible situations. It’s only started I fear.