For immediate release
News Release
14 November 2009
The Fonterra payout announcement was great news for farmers, but whether or not it will have a flow on effect in rural
real estate sales and land values depends on banks’ lending policies, says REINZ President Peter McDonald commenting on
rural figures released today by the Real Estate Institute of New Zealand (REINZ).
“The new payout is extremely welcome news,” Mr McDonald says, “and it will change a lot of people’s budgets, encouraging
greater confidence, but to date banks have been reluctant to show their hand and as a result, a lot fewer farms have
been sold this year than you would usually expect at this time of the year.”
The latest REINZ Rural Market Report shows the total number of farms sold in the three months to October 2009 was 205
compared with 390 in the three months to October 2008 and 582 in the three months to October 2007. There was, however,
an increase over the 178 reported sales in the three month period to September 2009.
The greatest number of sales were recorded in Canterbury (31) and Bay of Plenty (28). Twenty farms were sold in
Northland, 18 in Waikato and 17 in Auckland.
The value of farm prices in a three year comparison has dropped in the three months to October 2009 to a national median
of $875,000 compared with $1,305,000 in the three months to October 2007 and $1,500,000 in the three months to October
2008 at the peak of the Fonterra payouts. It is slightly down on the median price of $877,500 in the three months to
September 2009.
Around the country, there were six falls, four rises and four regions where farm median sale prices remained static. The
biggest rises were in Auckland, where the median price rose from $824,500 in the three months to September 2009 to
$903,000 in the three months to October 2009; in Taranaki (up from $666,250 to $1,000,000) and Manawatu / Wanganui (up
from $1,080,000 to $1,190,000).
Grazing accounted for the largest number of farms by type, with 111 sales recorded throughout the country in the three
months to October 2009. There were 35 horticulture properties sold and 25 finishing farms with just nine dairy.
However Mr McDonald says market sources suggest there is a strong interest in dairy farms, “although it is still early
in the season,” he says.
While farm prices were unimpressive in the period covered by the latest rural report, lifestyle properties have
performed strongly, demonstrating investment value, with turnover and prices up on the previous period.
The national median selling price for a lifestyle property in the three months to October 2009 was $445,000, well up on
the three months to September 2009 at $430,000. This compares to $428,000 and $425,278 in the corresponding periods in
2007 and 2008.
Prices were highest in Auckland ($750,000) and Nelson ($507,500), with the median for the most modest lifestyle
properties to be found in Southland ($235,000) and on the West Coast ($220,000).
A total of 1378 lifestyle properties were sold in the three months to October 2009 compared with 1365 in the three
months to September 2009; well up on the 1,054 sold in the three months to October 2008 but down on the 1,672 sold in
the corresponding period in 2007.
Mr McDonald says the next few months on the rural real estate market will be interesting to observe.
“Until we know what the banks’ policies are going to be, it’s a matter of ‘wait and see’. “
ENDS