Farmers buy affordable North Island farms
South Island sheep and beef farmers are buying farms in the North Island because they can't find anything in the South Island they can afford, says Property Brokers rural manager Peter Barnett.
He told rural professionals that farmers were being paid enormous amounts for farms in the South Island where dairy support was an option.
"But they can't find anything they can afford to replace the farms with - so they are coming north."
He was talking to about 50 bankers, lawyers, accountants and valuers in Feilding, last week, about trends in the rural real estate market.
Barnett said of the farms that had sold in Wairarapa this year, half had been bought by South Islanders.
He said that in the past, the trend was for North Islanders to go south because money from land sold in Taranaki or Waikato could buy twice as much area in Southland.
"But now we're seeing very little capital shifting from the North Island to the South Island. In Canterbury, sheep and beef farmers are getting $1000 a stock unit, but they can't find anything to buy."
He said a farm was sold recently in Apiti, to someone from the South Island.
Barnett said the number of farm sales was increasing, but they were generally smaller properties than during the peak of sales 2008. As a result, he said, there was still a shortage of big, quality farms on the market in the southern North Island.
Barnett said there had been a shift to dairy. "Some dairy farmers own several properties. There has been a fall in sheep numbers by 18 per cent."
And he talked about debt carried in the rural sector.
"It's now more than $50 billion. It has been creeping up after consolidating since 2009. And [Reserve Bank governor] Graeme Wheeler thinks it is too high."
But Barnett said farmer confidence was high.
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