Big fall in dairy farm sales and prices, but lifestyle block sales are booming - REINZ

The Real Estate Institute of NZ's Dairy Farm Price Index sank 24.1% in the three months to April compared to the same period of last year.

And versus the three months ended March the Index was down 3.5%.

The Index reflects the prices of dairy farms sold in the previous three months, but is adjusted to reflect differences in farm size and location, to give a more consistent measure of price trends.

There was an even bigger fall in the number of dairy farms being sold, with 52 sales recorded in the three months to April compared to 97 in the same period last year.

On a price per kilogramme of milk solids produced, the median selling price was $32.46/kg in the three months to April compared with $36.36/kg (-10.7%) in the same period last year 

However outside of the dairy sector the rural outlook was a lot less gloomy.

The REINZ All Farm Prices Index, which measures movements in the prices of all types of farms sold (adjusted for size and location), was down just 0.6% in the three months to April compared to a year earlier, although there was a bigger fall in the number of sales.

There were 407 farms of all types sold in the three months to the end of April compared to 485 in the same period last year, down 16%.

"As autumn colours signal the winding down of the growing season, so are sales volumes easing as the market heads toward the dormant months of winter," REINZ rural spokesman Brian Peacocke said.

"Bright spots in the rural sector during autumn include record demand and prices for weaner beef cattle, a substantial increase for organic milk from Fonterra for those few farmers fortunate enough to have persisted with organic supply, and widespread demand for land suitable for growing manuka for future production of honey."

However while many true farmers may struggle, the lifestyle block market is booming.

According to the REINZ, 2375 lifestyle blocks were sold in the three months ended April, compared to 1940 in the same period last year (+22.5%).

And the national median price of lifestyle blocks set a record high of $562,500 in the three months to March, up 1.8% compared to a year earlier.

"Strong volumes of sales and prices in the three months ending April 2016 confirms confidence in the lifestyle market throughout the country," Peacocke said.

"As a result, a number of regions report increasing difficulty in locating sufficient property to meet the demand."