Rural land values around NZ are heading for a correction but land is still a good investment, says First National Real Estate's leading rural valuer. Errol Saunders, managing director of Ford Baker Valuation, addressed rural real estate agents at First National's annual South Island Rural Seminar in Christchurch yesterday, giving an overview of trends in values of dairy, arable and finishing properties reports Scoop. Prices had stabilised and sales volumes had slowed dramatically over the past year, pointing to the likelihood of a downward correction over the next 12 months, Mr Saunders said. "We now have a low volume market. Buyers are just taking stock and hesitating. A rural contraction of 10% would not surprise me. Prices for dairy land had peaked in Mid Canterbury at around $55,000 per ha last season but this year should realise $40,000-$50,000 per ha. Grazing farm values were stable, with the price per stock unit at $600 - $800. Mr Saunders noted an increase in the number of unsold farms on the market, crediting a standoff between vendors and buyers expectations. Owners' reasons for selling included wanting to retire on a high market, consolidating and selling off excess land and the cost of finishing already-started dairy conversions. However, a correction did not mean rural property was going to follow residential property into a slump. The international credit crunch could hold a silver lining for New Zealand rural land values as it had turned some Asian overseas investors toward viewing food-producing land as the safest place for their money.
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