Farm sales stay strong in three months to June, despite onset of winter and volatile commodity prices, REINZ says; Median lifestyle block price hits record

Farm sales remained strong in the three months to June despite the onset of winter and continuing volatility in commodity prices, the Real Estate Institute of New Zealand (REINZ) says.

Meanwhile, the median sale price for lifestyle properties hit a new record high of NZ$477,500 during the three months amid a shortage of quality listings and a slowdown in sales during the winter months, the REINZ said.

There were 13 more farm sales (+3.3%) in the three months ended June 2012 than in the three months ended June 2011. Overall, there were 406 farm sales in the three months to June 2012, compared with 467 farm sales in the three months to May 2012, a decrease of 61 sales (-13.1%), REINZ said.

On a seasonally adjusted basis, after accounting for normal seasonal fluctuations, the number of sales fell by 6.8% during the three months to June from the three months to May.

1,413 farms were sold in the year to June 2012, 47.2% more than were sold in the year to June 2011, REINZ said.

The median price per hectare for all farms sold in the three months to June 2012 was NZ$17,565; a 12.8% increase on the NZ$15,568 recorded for three months ended June 2011, and an increase of 3.1% on the NZ$17,031 recorded for the three months to May 2012.

See the REINZ's comments on farm and lifestyle block sales below:

Nine of the fourteen regions recorded increases in sales volumes for the three months ended June 2012 compared to the three months ended June 2011.  Wellington recorded the largest increase in sales (+11 sales), followed by Bay of Plenty (+10 sales) and Nelson  (+8 sales). Southland recorded 12 fewer sales, Otago 11 fewer sales and Waikato six fewer sales in the three months to June 2012 compared to the three months to June 2011.  Compared to the three months ended May 2012 only Hawkes Bay, Northland and Wellington recorded increases in sales.

“Demand for farm properties remains strong, despite the onset of winter and the continuing volatility in commodity prices,” says REINZ Rural Market Spokesman Brian Peacocke.  “We are seeing continued strength in the finishing and grazing sectors, with continuing solid enquiry for good quality dairy farms, with some late in the season settlements.”

Included in sales for the month of May were 14 dairy farms at an average sale value of $29,369 per hectare.  The average farm size was 109.6 hectares with a range of 23 hectares in Northland to 236 hectares in Southland.  The average production per hectare across all dairy farms sold in June 2012 was 825 kgs of milk solids.

Grazing properties accounted for the largest number of sales with 50.5% share of all sales over the three months.  Finishing properties accounted for 20.2%, Dairy properties 11.6%, and Horticulture properties 7.6%.  These four property types accounted for 89.9% of all sales during the three months ended June 2012.

For the three months ended June the median sales price per hectare for dairy farms was $27,919 (47 properties), compared to $29,485 for the three months ended May 2012 (60 properties), and $30,828 (58 properties) for the three months ended June 2011.  The median dairy farm size for the three months ended June 2012 was 103 hectares.

For the three months ended June 2012 the median sales price per hectare for finishing farms was $18,851 (82 properties), compared to $15,899 for the three months ended May 2012 (82 properties), and $10,377 (59 properties) for the three months ended June 2011.  The median finishing farm size for the three months ended June 2012 was 71 hectares.

For the three months ended June 2012 the median sales price per hectare for grazing farms was $13,025 (205 properties) compared to $13,496 for the three months ended May 2012 (250 properties), and $12,892 (209 properties) for the three months ended June 2011.  The median grazing farm size for the three months ended June 2012 was 80 hectares.

For the three months ended June 2012 the median sales price per hectare for horticulture farms was $130,208 (31 properties) compared to $136,643 (26 properties) for the three months ended May 2012, and $132,401 (24 properties) for the three months ended June 2011.  The median horticulture farm size for the three months ended June 2012 was 7 hectares.

The lifestyle property market saw a 7.6% increase in sales in the three months to June 2012 compared to June 2011.  1,492 sales were recorded in the three months to June 2012 compared to 1,386 sales in the three months to June 2011.  92 fewer sales were recorded compared to the three months to May 2012 (+5.8%), although on a seasonally adjusted basis lifestyle sales fell by 3.4%. 

11 regions recorded decreases in sales compared to May while two recorded increases.  Bay of Plenty recorded the largest fall (-19 sales), followed by Canterbury (-15 sales) and Hawkes Bay (-11 sales).  Gisborne recorded the largest increase in sales (+3 sales), followed by Waikato (+1 sale).

The national median price for lifestyle blocks rose by $2,500 (+0.5%) from $475,000 for the three months to May to $477,500 for the three months to June to reach a new record high. Compared to three months to June 2011 the median price also rose by $17,500 (+3.8%). 

Commenting on the lifestyle property market statistics Brian Peacocke said, “The lift in the median price to a new record high reflects an ongoing shortage of quality listings in many parts of the country, although we have seen something of a slowdown in the number of sales with the onset of winter.”