Signs of rallying despite figures

The price of Otago farms slipped sharply in the three months to May, and with the median price a massive $1 million less than for the corresponding time a year ago. REINZ figures show the median Otago farm price for the three months to May was $847,000, down from $1.25 million in the three months to April and a massive $1 million less than the corresponding three-month period to May last year, about the time rising land prices peaked. There were 26 farms sold in Otago in the period under review, similar to the April period, when 25 were sold; but in the three-month period to May last year, 72 farms sold. It was a similar story in Southland, with 23 farms sold in the May quarter, compared with 108 for the corresponding period last year, and just 16 in the three months to April this year. The May median price was $1.276 million, $500,000 less than April and $1.2 million less than May last year reports The ODT. Despite the bleak Otago-Southland figures, REINZ national councillor and rural spokesman Peter McDonald said there were signs confidence was returning to rural real estate nationally. He said the recent sale of a $20 million dairy farm in Southland and steady increases in the number of properties sold was cause for cautious optimism for the sector. National sale figures for the three months to May reveal 288 farms were sold, up from 266 for the three months to April and 231 for the three months to March. Mr McDonald said the national median sale price across all farms sold for the three months to May was $1.150 million, up from the April figure of $1.042 million but similar to the March-quarter median price of $1.175 million. Mr McDonald said sale volumes and median prices were not trending down, which gave him confidence. Buyers were also not put off by Fonterra's reduced forecast milk price for the coming season of $4.55 a kg of milksolids; with a 25% increase in the number of dairy farms sold in the three months to May at a steady average sale price of $41 a kg of milksolids.