Volume of farm sales almost doubles in September to 103, REINZ points to 'cautious optimism' in rural sector

The number of farms sold in September almost doubled to 103 from 53 in the same month last year, driven by sales of grazing properties and a rise in sales in Northland, Auckland, and the Waikato, the Real Estate Institute of New Zealand (REINZ) says.

Figures from the REINZ's rural market report show there were 63 sales of grazing properties in September, up from 51 in August and just 37 in September 2010. Just four dairy farms changed hands, half the eight that were sold in August but up from just one in September 2010.

Meanwhile, at 10, double the farms were sold in Northland during September compared with September 2010, with this also well up on just four in August. Nine farms sold in the Auckland region, up from four in both August this year and September last year. And 11 farms changed hands in the Waikato, versus six in August and eight in September 2010.

The total of 103 farms sold in September is the most for a September month since 130 in September 2008. Just 75 sold in September 2009.

REINZ said the median price per hectare for all farms sold in the three months to September was NZ$17,694 compared with NZ$15,148 in the three months to August and NZ$17,447 for the three months to September 2010. It said the volume of sales for the 12 months to September was 1,053, the largest number of sales in over two years.

“Sales volumes to date reflect the early spring period, with many marketing programmes just commencing," REINZ rural market spokesman Brian Peacocke said. "The early signs indicate higher expectations for volumes and prices as market momentum increases."

“The supply of listings in some areas is becoming short, although overall the volume of properties available is higher than at the same time last year,” Peacocke added.

“The excellent early spring conditions, and for many the best growing conditions in years, combined with strong income levels is generating cautious optimism in the rural sector that is being reflected by the banks increased appetite for lending to farmers."

Eight regions recorded increases in sales volumes in the three months to September. Wellington, with seven, recorded the biggest increase, followed by Auckland and Northland at four each. Six regions recorded lower sales with Southland having the largest fall, down 11, followed by Otago, down nine, and West Coast down six.

The four dairy farms sold during the month of September were at an average price of NZ$32,334 per hectare. The average farm size was 138 hectares with a range of 96 hectares in the Waikato to 241 hectares in Southland. The average production per hectare across all dairy farms sold in September 2011 was 565 kgs of milk solids.

See REINZ's rural market statistics here.