Farm sales surge 109% in March quarter with Canterbury and Waikato recording the strongest regional rises and most growth in sales of grazing properties

By David Chaston & BusinessDesk

Farm sales surged 109% in the March quarter, to the highest level in a three month period since September 2008, the start of the global financial crisis, the Real Estate Institute of New Zealand (REINZ) says.

There were 189 sales in the month of March, compared with only 82 in the same month a year earlier. This was the highest volume since June 2008 when 216 were sold.

The number of farms sold rose to 397 in the three months ended March 31 from 190 sales a year earlier, according to REINZ. The median price per hectare for all farms sold rose 14.1% to $17,577.

“Sales over the three months to March reflect the strengthening of the rural economy, bolstered by favourable growing conditions, very good levels of production, solid market returns and a positive climate for borrowing,” said Brian Peacocke, rural market spokesperson at REINZ.

All regions, apart from the Hawkes Bay, recorded an increase in sales in the March quarter compared with a year earlier. Canterbury showed the largest increase, up 39 sales, followed by Waikato on 38, while the Hawkes Bay dropped 4 sales.

“Irrespective of the above, a note of caution is clearly emerging as the industry prepares for winter, with the expectation that income levels may moderate next season, and given seasonal variabilities, it is unlikely the combination of current benevolent factors will be repeated for some time to come,” said Peacocke.

Grazing properties accounted for the largest increase in sales, up 59.9 % over the three months. The median sale price for a grazing farm rose to $15,696 a hectare from $13,220 in March 2011.

The lifestyle property market increased its sales by 42.4% to 1,347.

See REINZ's full press release here and rural market statistics here.