Rural Market Waits For Warmer Weather

For immediate release

News Release 15 September 2009

Rural Market Waits For Warmer Weather

Muddy paddocks don’t make for the most attractive rural real estate propositions and farmers appear to be sitting out the unseasonal wet weather before putting their properties on the market resulting in a slow September for rural sales as seen in figures released today by the Real Estate Institute of New Zealand (REINZ).

REINZ National President Peter McDonald says the unusually cold and wet September has seen farmers put back plans to sell their properties.

“There’s a strong demand for dairy, helped along by the recent further increase in the auction price of milk powder adding 5.7% to the 50% increase over the previous two months” Mr McDonald says.

The total number of farms sold in the three months to September 2009 was 178, which is comparable with 183 in the three months to August 2009 but well down on the corresponding period in 2008 when 430 properties changed hands.

The greatest activity in the rural sector was in grazing properties. A round 100 grazing properties were sold in the three months to September 2009, but again this was well down on the corresponding period in 2008 when there were 225 properties sold.

Horticulture was the next busiest rural sector with 30 properties selling in the three months to September 2009. This compares with 34 in the corresponding period in 2008.

Around the country, Northland and Bay of Plenty saw most action in the three months to September 2009 with 26 rural properties sold in each of those districts closely followed by Canterbury at 24.

“Typically we would expect to see a pick up in the number of sales by October / November. It may be that this year we’ll be running a few weeks behind that pattern” Mr McDonald says.

In terms of value, median farm sale prices were down in most districts in the three months to September 2009 compared with the August figures. Gisborne bucked the trend rising from $577,900 to $925,000, as did Waikato, up to $1,900,000 from $1,663,655 and Hawkes Bay, up from $1,800,000 to $2,400,000. Taranaki’s median price rose from $617,000 to $666,250 while Bay of Plenty and Auckland remained the same at $1,000,000 and $824,500 respectively.

The national median dropped from $1m in the three months to August 2009 to $877,500 in the three months to September 2009 which is dramatically down in the $1,672,500 median price recorded in the three months to September 2008 at the height of the Fonterra payouts.

Once again, lifestyle properties have demonstrated their investment strength, with turnover and value continuing to hold firm.

The national median selling price for a lifestyle property in the three months to September 2009 was $430,000, the same as the three months to August 2009. This compares to $435,000 in the corresponding period in 2007 and 2008.

A total of 1,365 lifestyle properties were sold in the three months to September 2009 compared with 1,342 in the three months to August 2009; well up on the 1,071 sold in the three months to September 2008 but down on the 1,645 sold in the corresponding period in 2007.

ENDS

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