Farm sales on a slippery downward slope with caution seen across the country

The rural property market continued its steady decline over the three months to February with the volume of farm sales dropping by more than half over the last three years.

The Real Estate Institute of NZ recorded just 218 farm sales over the three months to the end of February, down almost a third (-32%) compared to the three months ended February last year, and down 54% from the three months ended February 2021 (see graph below).

In the 12 months to February, 942 farms of all types were sold throughout the country, down 32% compared to the previous 12 months.

The decline in sales was particularly pronounced for dairy farms, with dairy sales down 40% in the 12 months to February compared to the previous 12 months.

REINZ rural spokesperson Shane O'Brien said buyers were taking a cautious approach to buying land in all sectors of the country.

"The lower volume of sales was anticipated as buyers reacted to higher interest costs, environmental compliance and poor farm product prices," O'Brien said.

"The very dry conditions across much of the upper South Island are also impacting buyers and sellers as they focus on on-farm activities during these months.

"Although the market is sound, sellers need to realise that there isn't the depth of buyers or buyer confidence of the preceding two years. Sellers will need to position their properties in the market accordingly with that in mind," he said.

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