Median farm price hits $24,056 a hectare

20:46, Dec 17 2013

Farm property sales are continuing to climb as confidence in the sector remains high.

The latest Real Estate Institute of New Zealand (REINZ) figures show that all farm sales in Waikato to the year ending November 30 were up by 81 on last year. The biggest increase was in dairying and finishing farm sales, up by 42 and 17 respectively from November 2012.

Farm prices are also up modestly for all farms, currently at a median of $24,056 a hectare nationally for the three months to November 30 compared to $22,885 last year.

In dairying those figures are $40,023 a hectare compared to $37,166 last year.

However, REINZ rural spokesperson Brian Peacocke said there were some notable exceptions in Waikato, with some dairy farms being sold for between $50,000 and $60,000 a hectare.

Most of those farms, he said, either had a supply agreement with Tatua or were in its catchment area.

He said the majority of Tatua farms were in an area with high quality soils, and flat land. Tatua traditionally paid out a slightly higher milk price than Fonterra which, in conjunction with tight supply, meant they created a premium when they came up for sale.

However, across the board prices were slightly up on last year.

The increased payout from Fonterra, along with a prolonged period of low interest rates, was "promoting more confidence and enthusiasm in the region."

Peacocke said the booming sales would have positive spin offs for the local economy. "That money flows through into the towns and the cities and has a snowballing effect as people buy goods and services and commodities."

Bayley's Waikato Country sales manager Mark Dawe said the statistics from REINZ rang true to what he was seeing on the ground.

He said buyer confidence would remain strong despite heading into summer with the possibility of drought, an election on the horizon and indications that interest rates would lift next year.

"There have been some farmers that have sat still for a period of time and they're in a very positive position to move now.

"I think also we're seeing a very enthusiastic lending environment now."

PGG Wrightson's Waikato Country sales manager John Sisley said the statistics were a reflection that normal levels of economic confidence were returning to the rural sector.

He said the increase in sales also needed to be kept in context, as the average number of sales a year over the last 15 years was around 100. Sales in Waikato this year total 91.

The demand for good sheep and beef properties is also strong in Canterbury, Otago, Southland and Hawke's Bay, particularly in the 5000-10,000 stock unit range with prices ranging from $7000 to $10,000 a hectare, with top properties in demand.

PGG Wrightson Real Estate South Canterbury sales manager Susie Williams said as properties sold, more were needed to offer to buyers.

Canterbury's lifestyle property market has been quieter in November, according to Mrs Williams, particularly at the top end of the market.

"Properties in the $1 million bracket-plus are proving a bit sticky and buyers are being thorough in their due diligence," she said.

In November, 214 lifestyle blocks were sold in Canterbury, compared with 227 the previous month.

The median sale price for lifestyle blocks in Canterbury for November was $565,500 up slightly from $559,000 in the previous month.

That was a record for the province.


Waikato Times