Farm sales across the country are practically at a standstill, with rural property analysts saying farmers need to be more realistic about what their land is worth.
An anticipated spring sales rush failed to occur, which meant that just 147 farms were sold in New Zealand in the three months to the end of October – a 60 percent tumble from 2008 and an all-time low since records began in 1996.
The worst-hit regions are Waikato, Taranaki, Canterbury and Southland.
And median sale prices are also down in the main farming regions, further underlying a lack of confidence in the market, although prices are up in some areas.
Analysts searching for signs of optimism are looking to milk solid prices, which are showing some lift, and that may inject some confidence into the market. Fonterra's projected payout is $6.60 per kg of milk solids for 2010-11.
And regionally there are some signs of a lift. In Hawke's Bay, property valuer and analyst Greg Morice said while larger grazing blocks were not selling, sales of smaller sheep and beef units of about 100ha had increased.
Morice said that seemed to be because farmers were able to get finance for smaller blocks to add to their portfolio but not for larger properties.
He said good properties were still selling beyond expectations but the more remote areas had taken a hit.
Morice says part of his work was partnering with rural real estate agents to help sellers accept changes in the market.
"Vendor expectations are still based on prices fetched two to three years ago. Agents who have a good cash buyer are using valuations to help make vendors see reality."
There was also room for cautious optimism in some parts of the Waikato, while Real Estate Institute spokesman Bryan Thomson said anecdotal reports pointed to a lift in interest in dairy farms in the South Island.
PGG Wrightson real estate Taranaki agent Pam Hamerton said there were plenty of listings in the region but vendors were split between those offering their properties at realistic prices and those who were not.
In its latest Rural Focus report this month, the National Bank said wet weather and a roller-coaster past two years had dented confidence, adding that the rural property market was "still trying to find a floor".
"That's highlighted by the gap between buyers and sellers continuing to increase, with the number of properties sold in the August to October period decreasing to an all-time low."
But Thomson preferred to look on the bright side, saying income projections were good, which would mean people would become more confident about buying.
Lower prices would also persuade people buying a farm made good investment sense."It is a matter of sellers coming to terms with the fact people will buy for economic rather than aesthetic value."
- Sunday Star Times
Is it time for authorities to introduce tougher penalties for poaching?Related story: Booby traps for poachers cost farmers