Farm real estate market getting confident again

Lower interest rates, rising stock prices and recent rain have boosted confidence in the district's pastoral farming market, which had ground to a near standstill over the past 18 months.Farmers wanting to retire or exit the industry had been withholding properties last year, waiting for the market to recover, said Rabobank Gisborne rural finance specialist Adrian Brown. But over the past six months or so, the market had consolidated at a good level that could be sustained by investors and lenders. Vendors were now realising prices would not revert back to the peaks of two years ago. At that stage, farms in this district were fetching record prices of up to $750 a stock unit. These had now dropped to a more sustainable level of around $500-$550 in the Gisborne district and around $400 in Wairoa, said Mr Brown. But at that level people had the ability to get in and make a bit of profit. As a result of that, customers were making offers reports The Gisborne Herald. Just before Christmas, a number of good-sized pastoral farms had come on to the market, he said. Rural sales specialists in Gisborne were noticing the increased level of activity after the winter lull, although the high New Zealand dollar was not helping, said Rod Chrisp of Bayleys. Some very good farms had recently come on to the market. Those in a good location were attracting a good level of interest, he said. This was buoyed by the good outlook for commodity prices in a market where there was no oversupply. Rain over the past couple of weeks has averted what could have been the third drought season in a row, although the longer-term prognosis for autumn remains unknown.