Farm sales at lowest level in over four years

The number of farm sales are at the lowest level in over four years, according to new figures from the Real Estate Institute of New Zealand (REINZ).

Data shows there were 105 less farm sales (-24.6 percent) for the three months ended June 2019 than for the three months ended June 2018. 

Overall, there were 322 farm sales in the three months ended June 2019, compared to 380 farm sales for the three months ended May 2019 (-15.3 percent), and 427 farm sales for the three months ended June 2018. 

The REINZ All Farm Price Index rose 2.4 percent in the three months to June 2019 compared to the three months to May 2019. 

Compared to June 2018 the index rose 7.3 percent.

The data showed the non-dairy sector is holding value more strongly than the dairy sector.
The data showed the non-dairy sector is holding value more strongly than the dairy sector. Photo credit: Getty

The REINZ All Farm Price Index adjusts for differences in farm size, location and farming type, unlike the median price per hectare, which does not adjust for these factors.

"Sales data for the 3 month period ending June 2019 confirms numbers of farm sales for the most recent quarter are at their lowest level for at least the last 4 - 6 years," said REINZ rural spokesperson, Brian Peacocke

"By contrast, the slight rise in farm sale values as indicated by the All Farm Price Index as opposed to the decrease in the Dairy Farm Price Index indicates the non-dairy sector is holding value more strongly than the dairy sector," he said.

1,342 farms were sold in the year to June 2019, 9.3 percent fewer than were sold in the year to June 2018, with 37.4 percent less dairy farms, 5.9 percent more grazing farms, 14.2 percent less Finishing farms and 18.8 percent less arable farms sold over the same period.

The median price per hectare for all farms sold in the three months to June 2019 was $22,044 compared to $21,745 recorded for three months ended June 2018 (+1.4%). The median price per hectare decreased 0.9% compared to May 2019.  

Only one of the 14 regions recorded an increase in the number of farm sales for the three months ended June 2019 compared to the three months ended June 2018 - Gisborne (+7). Waikato recorded the most substantial decline in sales (-18 sales) followed by Bay of Plenty (-15 sales). 

Compared to the three months ended May 2019, two regions recorded an increase in sales with the biggest increase being in Southland (+4 sales). 

Points of Interest around New Zealand include:

 

Northland/Auckland - minimal dairy activity; light sales volumes of finishing, grazing and horticultural properties; most farmers currently focusing on the forthcoming season with calving and lambing now coming to the fore

Waikato - light activity in the dairy sector where a number of farmers took winter holiday opportunities; sufficient volumes of finishing and grazing property sales to register; good winter grass growing conditions throughout the province

Bay of Plenty/Central Plateau - an easing of sales volumes in the horticultural industry but one particularly significant sale of a large kiwifruit orchard in the Whakatane district where top quality provided strong value in excess of $45m; a solid sale for a deer unit in the Tauranga area, but zero activity in the other land use sectors. 

Taranaki - winter paralysis within the dairy industry and light sales volumes for finishing and grazing units

Manawatu/Wanganui - well spread sales of finishing and grazing units plus one good arable property, with a particularly strong flourish of sales in the Tararua district, including a quality deer farm at sensible money

Wairarapa/Wellington - quiet in the main but some light activity on grazing units in the south and west of the district

Nelson/Marlborough - a little bit of everything during June with no one sector standing out; confidence quietly building for the spring

Canterbury/West Coast - some good strong sales of finishing properties albeit mainly smaller units; one dairy farm sale on the West Coast but generally harder throughout the province in that sector; reports of banks being constrained with their lending appetite

Otago - light sales volumes of dairy, finishing and grazing units with further reports of banks being increasingly harder with their lending criteria; considerable early activity with forestry interests pursuing investment opportunities within the more marginal store-stock areas, such interest emanating from both local and off-shore sources

Southland - sales figures confirm light results in the dairy and grazing sectors, but good results at solid prices across the board for finishing properties, albeit a number of smaller units; interest predominantly local, either from adjoining land owners or from those within reasonably close proximity.

Newshub.

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