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137 farms sold in June, the most for a June since 2008 as early winter activity reflects growing confidence; prices per hectare slip

137 farms sold in June, the most for a June since 2008 as early winter activity reflects growing confidence; prices per hectare slip

Data released today by REINZ shows that there were only 11 more farm sales in June 2013 than there were in the same month a year earlier, but early winter sales enquiry has the market feeling more buoyant.

“Enquiry in all farm categories is consistently strong in all regions, in contrast to the normal seasonal pattern in winter,” says REINZ Rural Market Spokesman Brian Peacocke, “the limiting factor on farm sales is the availability of properties to meet demand, impacting on sales volumes in the latter part of the June quarter. In most regions farms that have been on the market for two to three years have now been sold”.

“In South Waikato dairy farms have been under strong competition."

"The final five Carter Holt dairy farms have been sold by tender with sharemilkers in place, with possession in mid-July. Notably these sales have occurred without Fonterra shareholdings. Strong regional demand has seen an increase in dairy farm values in Southland.”

“The increased dairy payout, lower New Zealand dollar and continuing low interest rates are the key drivers of increasing farm confidence across the country.  As a result, all regions are reporting a shortage of listings, with those farms available for sale are attracting very strong attendance at open days, and multiple offers.”

Grazing properties accounted for the largest number of sales with 48.1% share of all sales over the three months to June, Dairy properties accounted for 13.9%, Finishing properties accounted for 19.4% and Horticulture properties accounted for 8.9% of all sales.  These four property types accounted for 90.3% of all sales during the three months ended June 2013. 

In June alone, the market recorded 137 sales, which is 9% more than June last year but more than 37% above the average over the past four years.

The median price per hectare slipped to $19,716 in the three months to June 2013, 4% lower than a month ago, but 12% higher than June 2012. 

Nationally, lower average prices were seen for dairy units, while higher average prices were seen for finishing and grazing properties compared with those same categories in May; all others were stable.

June sales included: 
    8 arable farms,
  17 dairy farms,
  26 finishing units,
  61 grazing properties,
  17 horticultural,
    8 farms of other types

The number of sales is presented here, without the average price, because average prices bounce around dramatically depending on the size and type of business unit being sold. However, the following table sets out the median prices per hectare over the past three months, as reported by REINZ.

$/ha   Arable Dairy Finishing Forestry Grazing Hort Special
                 
New Zealand   30,031 29,555 18,672 5,542 13,831 120,345 28,333
                 
Northland     12,185 13,267 6,004 8,591 135,000  
Auckland   30,488 34,932 18,734   24,138 271,203 90,444
Waikato   104,228 26,455 19,052   22,976   96,311
Bay of Plenty   33,438 37,234   3,159 22,521 160,141  
Gisborne   64,300       4,501 69,566 5,579
Hawkes Bay   29,575   11,229 2,955 10,133 63,333 52,498
Taranaki     37,291 62,303   24,875    
Wang/Manawatu   17,290 25,622 9,005 7,485 8,213   136,065
Wellington     21,798   5,260 15,342    
Nelson   75,157 23,944 31,887   15,138 79,000  
West Coast     17,266 22,500   7,250    
Canterbury   25,000 45,750 41,463 7,813 13,823   124,178
Otago   17,195 37,482 13,351   11,818 177,273 14,202
Southland   3,000 36,643 17,425   18,966   13,826

Farm sales

Select chart tabs

New Zealand
Source: REINZ
Arable
Source: REINZ
Dairy
Source: REINZ
Finishing
Source: REINZ
Forestry
Source: REINZ
Grazing
Source: REINZ
Horticulture
Source: REINZ

Lifestyle blocks

The lifestyle property market saw an 18.2% (+271 sales) increase in sales volume in the three months to June 2013 compared to June 2012.

1,763 sales were recorded in the three months to June 2013 compared to 1,492 sales in the three months to June 2012.  81 fewer sales were recorded compared to the three months to May 2013 (-4.4%).

For the 12 months to June 2013 there were 6,124 unconditional sales of lifestyle properties, an increase of 16.1% over the 12 months to June 2012.10 regions recorded increases in sales compared to June 2012 while three recorded decreases in sales.

Auckland recorded the largest increase (+135 sales), followed by Waikato (+35 sales) and Canterbury (+26 sales).

Compared to May 2013, four regions recorded increases in sales with nine regions recording a decrease.

Taranaki recorded the largest increase in sales (+18 sales), followed by Otago (+12 sales) and Southland Bay (+5 sales).

The national median price for lifestyle blocks rose by $27,500 (+5.8%) from $477,500 for the three months to June 2012 to $505,000 for the three months to June 2013.

The median price for lifestyle blocks in Auckland rose by 10.2% in the year to June 2013, and rose by 10.8% in Waikato, however, the median price fell by 1.8% in Canterbury.

Compared to May 2013 the median price eased by $4,500 (-0.9%) from $509,500 in May to $505,000 in June.

The number of days to sell for lifestyle properties eased by two days, from 67 days for the three months to the end of May to 69 days for the three months to the end of June.  Compared to the three months ended June 2012 the number of days to sell improved by 15 days from 84 days to 69 days.

Canterbury recorded the shortest number of days to sell in June at 47 days, followed by Taranaki at 52 days and Southland at 53 days.

Gisborne recorded the longest number of days to sell at 105 days, followed by Manawatu/Wanganui at 94 days and Bay of Plenty at 92 days.

Commenting on the lifestyle property market Peacocke said, “Increasing confidence and rising demand for properties is emerging in the lifestyle market with some regions reporting strong interest from buyers while at worst some are reporting a steady market.”

“The lifestyle market on the southern edge of the Auckland urban area is strong with interest in properties large enough for future sub-division and healthy activity in the $1 million range."

"Activity is also strong in central Waikato and around Hamilton with Auckland and ex-pat purchasers active. There have been a considerable number of appraisals carried out in the Waikato as vendors prepare for the spring market. Auckland buyers are also increasingly active in the Bay of Plenty.”

“The Canterbury market remains active in the $600,000 - $700,000 range, although quieter above $800,000 with buyers predominately coming from Christchurch City.”

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1 Comments

“The increased dairy payout, lower New Zealand dollar and continuing low interest rates are the key drivers of increasing farm confidence across the country.  As a result, all regions are reporting a shortage of listings, with those farms available for sale are attracting very strong attendance at open days, and multiple offers.”

 

Predicating the worth or the sustainability of business indebtedness upon recent levels of highly volatility interest and FX rates is a recipe for disaster,  Retail access to sophisticated, but nonetheless, cheap, agile hedging programs should be mandatory for significant business borrowers.

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