Farm sales surge on back of rural gains
Farm prices are up 22 per cent on a year ago, but buyers are aware of the declining dairy payout, the Real Estate Institute (Reinz) says.
Reinz's figures for the three months ended May show 564 farms were sold, up 10 per cent on the same 2013 period, and up 13 per cent on the previous month.
The median price per hectare for all farms was $25,018, up 22 per cent on the three months to May last year.
Reinz's rural spokesman Brian Peacocke said the market leading up to May had reflected the rural sector's healthy state.
But, as winter approached, a shortage of stock and a "hint of caution" about the easing dairy payout were making buyers more thorough with their due diligence.
Reinz's all farm price index, which adjusts for farm sizes, location and farming types, fell 0.1 per cent in the three months to May, compared to the three months to April. However, compared to May 2013, the index was ahead 13.7 per cent.
Bay of Plenty had the largest increase in sales, followed by Northland and Otago and Southland, Peacocke said.
Kiwifruit orchards had been strongly traded in the Bay of Plenty recently, and there was competition between local and overseas interests for available property in Canterbury.
Sales of Solid Energy properties had helped boost a strong market and increased numbers for finishing and dairy support units in Southland, where local buyers continue to dominate the already firm market. Just over 40 per cent of the sales were for grazing properties, with finishing properties accounting for 21.6 per cent and dairy properties for 16.8 per cent.
The median price for dairy farms was $33,543 per hectare, down from $34,850 a year ago. The Reinz dairy farm price index fell by 0.5 per cent in the three months to May compared to April, but was up 5.1 per cent on a year ago.
Sales of lifestyle properties flagged by 4.7 per cent or 87 sales compared to the same three month-period a year ago.
However, they rose 7.2 per cent over the last year, led by a surge of interest in Otago.
Demand for lifestyle block sales in Auckland helped drive the national median price up by 3.5 per cent to $527,500, compared to the same period a year ago.
Auckland lifestyle block prices reached a new high of $902,500, a 12.5 per cent increase.
In Christchurch, lifestyle sales were slowing and buyers were changing emphasis from the north of the city to the south, where traffic was lighter.