Low farm prices reflect caution

The rural property market remains sluggish, but there is some improvement on the horizon, experts say. REINZ  figures show the value of farm prices dropped to a national median of $1 million in December, compared with $1.65m in 2008 and $1.53m in 2007. PGG Wrightson real estate manager Stuart Jackson said that although the market was sluggish, there were signs of movement reports Stuff. "When you look at the same period last year, the outlook was all negative and we were worried about how bad it was going to be, but like all these things, it's a slow improvement." Mr Jackson said the average sale time for farms was about 160 days, compared with about 80 days in 2007. "That sounds pretty bad, but you have to remember it was as high as 190 days at one point last year. "We're noticing that some of the larger properties are starting to move. "It started to happen just before Christmas, and we saw a few major $2 million-plus properties go. The sale of Fox Peak, near Fairlie, for more than $6 million, was a classic example of this." REINZ figures showed that the total number of farms sales throughout New Zealand in the three months to December last year was 241, compared with 346 in the same period in 2008. Canterbury fared the best, with 30 farms (20 grazing, five arable, three special and one each in finishing and forestry) sold in December alone, with a median price of $1.2m. Although the median was up on last year's $957,000, it was still well below 2008's median of $2.8m.Rural real estate consultant Dave Thomson said the figures were "somewhat misleading". "REINZ really only has two classifications, which is rural and residential. "It means that lifestyle blocks of, say, 20 hectares, are called farms under that criterion. In reality, those are nothing of the sort unless you're running a market garden." "Everyone is just being really cautious at the moment. They're waiting on a lot of things. The sheep market had good prices for lambs, and the proposed payouts for dairy are looking good too, but again, we won't know until the final payout arrives, Mr Thomson said.