Fewer farms are selling and lifestyle block sales are bouncing along the bottom

The rural property slump continued in June with farm sales continuing to decline and lifestyle block sales bouncing along the bottom.

The Real Estate Institute of NZ recorded 215 farm sales nationally over the three months to the end of June. That's down 13% compared to the three months ended May, and down 6% compared to the three months ended June last year.

The latest figures show the continuation of an ongoing slump in farm sales which have almost halved over the last four years. (See the first graph below for the trend).

Prices are also significantly weaker, with the REINZ All Farm Price Index, which adjusts for differences in farm sales by farm size, type and location, declining by 12% in the three months to June this year compared to the same period of last year.

Dairy farm sales held their own over the three months to June, rising by 3% compared to a year earlier but prices were weaker, with the REINZ Dairy Farm Price Index, which adjusts for differences in the mix of sales by farm size and location, dropping 12% on an annual basis.

REINZ rural spokesperson Shane O'Brien said interest from potential buyers was lower than expected.

"Buyer enquiry on most farm listings is lower than desired as farmers across all sectors grapple with the change in weather, lower than needed farm product prices and higher farm working expenses," he said.

While farm sales remain on the slide, lifestyle block sales appear to have stabilised after falling steadily from late 2020 to early 2023.

Altogether 1296 lifestyle blocks were sold in the three months to June, down just 1.6% compared to the same period of last year.

On an annual basis 5512 lifestyle blocks were sold in the June year, down 4% compared to the previous 12 months.

The median price of all lifestyle blocks sold in the 12 months to June this year was $975,000, down 2.1% compared to a year ago.

"The slight decrease in [lifestyle] sales activity compared to 2023 wasn't unexpected as many buyers continue to balance higher interest rates and challenging economic conditions when making buying decisions," O'Brien said.

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