Dairy farm prices are steadily improving as international milk prices rise, with the REINZ Dairy Farm Price Index up 4.1% for the three months to November compared to the same period last year.
The Dairy Farm Price Index adjusts for differences in farm size and location but other measures of dairy farm sales were also up, with the median farm price per kilogramme of milk solids at $41.05 in the three months to November, up 17.9% compared to the same period last year.
The median price per hectare for dairy farms was $47,385 over the three months to November, which was up by a third compared to a year ago.
Prices of other farms were also up, with the REINZ All Farm Price Index up 4.9% for the three months to November compared to the same period last year.
Sales numbers were also up, with 447 farms of all types selling in the three months to November compared to 416 for the same period last year.
However Real Estate Institute of New Zealand rural spokesman Brian Peacocke said farm buyers remained cautious.
"An increase in volumes of farm sales in the three months ending November reflects improving conditions in the rural market, but the predominant comment in the marketplace is that a mood of caution prevails," he said.
"This is evidenced by detailed pre-purchase due diligence investigations and a level of concern amongst purchasers regarding volatility of income.
"Whilst the increase in the milk payout is great news and has extended the lifeline for some, it is clear financial institutions are maintaining expenditure restrictions on their client base, and as would be expected, are insisting on fiscal prudence.
"The above factors are contributing to a lack of confidence in some areas," he said.