Rural Prices Steady In Slower Market

FOR IMMEDIATE RELEASE

News Release 12 December 2008

Rural Prices Steady In Slower Market

Latest figures from the Real Estate Institute of New Zealand (REINZ) show prices are holding firm in the rural real estate sector albeit in a slower market.

The November figures released today, clearly show there is confidence in the rural sector and in particular in dairy, says REINZ National Councillor and rural spokesperson Peter McDonald.

“Prices for sales in November this year are consistent with the corresponding period last year. In fact, they are slightly higher.”

The median price for dairy farms sold in November 2008 was $4,300,000 compared with $4,200,000 in November 2007.

Median prices are strong across the whole rural sector with Waikato, Auckland, Gisborne, Canterbury and Southland notably stronger compared with the three years from 2006. The median sale price across all farms in Waikato for November 2008 was $3,500,000 compared with $2,120,000 in the corresponding period in 2006, $2,450,000 in 2007 and $3,012,500 in October 2008. Auckland was up to $1,750,000 for November 2008 compared with $990,000 in October 2008. Gisborne rose from $1,115,000 to $2,062,500 over the same period.

In the South Island, median farm prices in Canterbury have jumped from $1,100,000 in November 2006 to $2,568,000 in November 2008. Southland has climbed equally strongly with growth from $1,177,000 in November 2006 to $3,100,000 in the latest figures.

Nationwide, median farm prices have risen from $1,100,000 in November 2006 to $1,850,000 in November 2008.

“While we are very comfortable with the level of prices across the board, there is some concern over the slowing number of sales compared with this time last year,” Mr McDonald said.

New Zealand-wide there were 104 farm sales in November 2008 compared with 291 in the corresponding period in 2007 and 241 in 2006. The drop in the number of sales is across all regions.

“There are, of course, many external factors contributing to people’s hesitancy or inability to purchase rural real estate,” Mr McDonald said. “The global recession, the drop in the expected payout from Fonterra, tougher criteria for loans and availability of funding are all having an impact on the number of sales.”

“Nevertheless, the fact prices are remaining firm is a reflection of the ongoing confidence in the sector, helped along by the huge drop in interest rates over the last three months, and the possibility these will drop even further, combined with reduced farming costs such as fertiliser and meal etc..”

Once again, the lifestyle farm market continues to hold well and has been reasonably active, Mr McDonald said, although like the farm market, numbers of sales are slower than they were a year or two ago.

The national number of lifestyle properties sold in November 2008 was 309 compared with 349 in October 2008. This compares with 683 in November 2007.

However the value of these properties has remained steady compared with the same period last year – today’s $468,000 median sale price compares with $472,000 for the same period last year.

“With rural property prices holding firm, I believe we will see a turnaround in the volume of sales as soon as the impact of recent interest rates is truly felt,” Mr McDonald said.

ENDS

REINZ_Rural_Market_Report_Stats__November_2008.pdf

For more real estate information and market trends data, visit www.reinz.co.nz . For New Zealand's most comprehensive range of listings for residential, lifestyle, rural, commercial, investment and rental properties, visit www.realestate.co.nz - REINZ's official property directory website.

Explanatory Note:

The information provided by the Real Estate Institute in relation to the following rural real estate market regional highlights covers a three month period. Therefore references to November results refer to the period from 1 September – 30 November and references to October refer to the period from 1 August – 31 October.

For more real estate information and market trends data, visit www.reinz.co.nz . For New Zealand's most comprehensive range of listings for residential, lifestyle, rural, commercial, investment and rental properties, visit www.realestate.co.nz - REINZ's official property directory website.

Rural Regional Highlights – November 2008

Northland

The median farm price in Northland dipped to $900,000 in November, from $950,000 in October (November 2007: $1,050,000). 22 farms sold (October 2008: 29; November 2007: 41). The 22 farms sold consisted of 14 grazing, four horticulture, two dairy, one each finishing and arable).

The median price for a lifestyle block eased to $394,500 in November, from $399,000 in October (November 2007: $299,000). 84 lifestyle blocks sold during the month (October 2008: 85; November 2007: 166).

Auckland

The median farm price in Auckland rose to $1,000,000 in November (October 2008: $955,000; November 2007: $1,401,900). 21 farms (15 grazing, three dairy, two horticulture and one finishing) sold (October 2008: 22; November 2007: 34).

The number of lifestyle blocks sold increased to 144 in November. (October 2008: 137; November 2007: 305). The median price eased back to $755,000 in November, down from $766,100 in October (November 2007: $770,000).

Waikato

49 farms (33 grazing, 12 dairy, two arable, and one each finishing and forestry) sold in November, up from the 46 sold in October (November 2007: 69). The median price was also up at $3,500,000 from $2,475,000 in October (November 2007: $2,277,000).

126 lifestyle blocks sold in November, up from the 116 sold in October. The median price also increased to $475,000 from $454,250 in October. In November 2007, 228 lifestyle blocks sold with a median price of $445,500.

Bay of Plenty

The median price for a farm dipped again to $1,150,000 in November (October 2008: $1,200,000; November 2007: $1,200,000). 25 farms (11 grazing, nine horticulture, three forestry and two dairy) sold in November, down from the 29 sold in October (November 2007: 41).

67 lifestyle blocks sold in November (October 2008: 52; November 2007:140). The median price dropped to $480,000 from October’s $525,500. (November 2007: $480,000).

Gisborne

Eight farms (four grazing, two horticulture and one each finishing and forestry) sold in November (October 2008: six; November 2007: 12). The median price increased to $1,092,500 in November, from $1,045,000 in October (November 2007: $1,285,000).

Lifestyle block sales were down two with 15 sold (October 2008: 17; November 2007: 15). The median price eased to $465,000 from $470,000 in October (November 2007: $405,000).

Hawkes Bay

The median farm price dropped to $1,050,000 in November, from $1,070,000 in October (November 2007: $1,300,000). 13 farms sold (October 2008: 9; November 2007: 28) consisting of eight grazing, three horticulture and two finishing.

34 lifestyle blocks sold in November, down from the 37 sold in October. The median price jumped to $485,000 from $441,000 in October. In November 2007, 70 lifestyle blocks sold with a median sale price of $500,500.

Taranaki

The median farm price in Taranaki eased slightly to $1,450,000 in November, from $1,475,000 in October (November 2007: $1,500,000). 29 farms (16 grazing, eight dairy, two each finishing and horticulture plus one special) sold in November, up from the 22 sold in October (November 2007: 29).

29 lifestyle blocks sold in November (October 2008: 36; November 2007: 72). The median price rose to $410,000 in November (October 2008: $384,000; November 2007: $375,000).

Manawatu/Wanganui

23 farms (17 grazing, three finishing, two arable and one dairy) sold in November (October 2008: 31; November 2007: 49). The median price increased to $1,370,000 from $1,180,000 in November (November 2007: $1,300,000).

The median price for a lifestyle block was up at $350,000 in November (October 2008: $315,000; November 2007: $310,000). In total 99 lifestyle blocks sold, down from the 119 sold in October (November 2007: 142).

Wellington

The median price for a Wellington farm remained steady at $1,950,000 in November, (October 2008: $1,950,000; November 2007: $1,417,500). 11 farms (nine grazing and one each arable and dairy) sold in November, up from the nine sold in October (November 2007: 16).

55 lifestyle blocks sold in November (October 2008: 52; November 2007: 102). The median price rose to $430,000 from $412,500 in October (November 2007: $380,000).

Nelson/Marlborough

The median farm price rose to $1,150,000 in November, from $600,000 in October (November 2007: $996,000). In total, 14 farms (eight grazing, two each arable and dairy and one each horticulture and forestry) sold, down from the 17 sold in October, and down on the 32 sold in November 2007.

46 lifestyle blocks sold in November, a decrease on the 57 sold in October 2008. (November 2007: 91). The median price decreased to $447,500 from $480,000 in October (November 2007: $500,000).

West Coast

One (dairy) farm sold in November, down from the total eight farms sold in October (November 2007: 11). The median price was also down at $1,548,000 (October 2008: $2,526,725; November 2007: $850,000).

The median price for a lifestyle block eased back to $192,500 in November, from $200,000 in October (November 2007: $275,000). 20 lifestyle blocks sold in November, down on the 23 sold in October (November 2007: 24).

Canterbury

57 farms (33 grazing, eight arable, six special, four each dairy and finishing and two forestry) sold in November, down on the 66 sold in October (November 2007: 134). The median price increased to $2,250,000 from $2,137,560 in October and $1,852,500 in November last year.

175 lifestyle blocks sold, compared with 194 sold in October. The median price was unchanged at $430,000 (October 2008: $430,000). In November 2007, 287 lifestyle blocks sold with a median price of $450,000.

Otago

The median farm price dropped to $1,600,000 in November, down from $1,830,650 in October (November 2007: $1,400,000). 29 farms sold (October 2008: 30; November 2007: 72). The farms sold consisted of 12 grazing, nine finishing, three special, two each, arable and horticulture and one dairy.

73 lifestyle blocks sold in November (October 2008: 70; November 2007: 78). The median price fell to $290,000 from $317,500 in October and $493,750 in November 2007.

Southland

46 farms (22 grazing, eight each dairy and finishing, five special, and three arable) sold in November, down on the 66 sold in October 2008 (November2007: 116). The median price rose to $1,800,000 in November from $1,750,000 in October (November 2007: $1,810,000).

48 lifestyle blocks sold in November, down from the 59 sold in October. The median price increased to $322,500 from $297,000 in October. In November 2007, 78 lifestyle blocks sold with a median price of $294,000.

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