Farm sales finish 2011 strongly on low interest rates, good growing conditions, rising incomes and offshore interest, REINZ says

Good growing conditions, low interest rates, rising incomes and offshore interest meant a strong finish in 2011 for farm sales, the Real Estate Institute of New Zealand (REINZ) says.

There were 1,193 farms sold in the year to December, the highest annual figure since the June 2009 year.

This was boosted by 353 farm sales in the three months to December, up 66% from the same period in 2010, figures released by the REINZ show. 141 farms were sold in December alone.

A jump in farm sales in the Canterbury region led the way, with 71 sales in the three months to December 2011 up from 32 a year earlier.

“Rural property sales have had a strong finish to 2011 reflecting the very good growing conditions across the country, save for Southland and south Otago, rising income levels and favourable interest rates,” REINZ Rural Market spokesman Brian Peacocke said. 

“We have also seen the emergence of off-shore buyers, mainly from Europe, acquiring properties in both Canterbury and other regions, although this comes after extensive due diligence and securing OIO approvals in the six to twelve months prior to purchase,” Peacocke said.

“The market is experiencing strong sales growth in the dairy, finishing and grazing sectors.

The demand for top quality dairy properties is outstripping supply, helping to underpin prices and we are seeing lower quality properties attract solid interest as a result.  Sales of finishing properties are up noticeably from 12 months ago as are sales of grazing properties.

High prices for commodities continue to deliver further increases in enquiry and interest from potential purchasers,” he said.

The median price per hectare for all farms sold in the three months to December 2011 was NZ$20,445, the same as for the three months ended November 2011 and down NZ$3,230 per hectare on the NZ$23,675 recorded for the three months to December 2010.