Rural Property Market Still Quiet

Rural Property Market Still Quiet

The rural property market remains constrained but median farm prices have shown a slight improvement over the same period last year, according to the latest Real Estate Institute of New Zealand (REINZ) Rural Market Report released today.

“Across the country, the median farm price for the three months to September 2010 was $1,012,500, which is well up on the median price of $877,500 for the same period last year,” says Real Estate Institute of New Zealand spokesperson Bryan Thomson.

In the three months to the end of September 2010, 164 farms changed hands, a 14.6 per cent decrease on the 192 sold in the three months to August, but just 7.9 per cent down on the 178 sold in the three months to September 2009.

Although the national median farm sale price showed a slight improvement in the three months to September 2010 compared to the same period last year, it was still well down on the median of $1,672,500 for the equivalent period in 2008.

The median price for the 12 dairy farms sold in the three months September was $3,163,121, which is up slightly on the total for the three months to August 2010 of $3,100,000. The average price per hectare increased to $53,920 from $29,739 in August. The average price per kilogramme of milk solids has fallen further to $30 from $33 in August and $37 in July.

“Late last month, Fonterra announced its second-highest payout of $6.70 (before retentions) for 2009/10, up from $5.21 last year so we would expect to see impact from this positive news over coming months,” says Mr Thomson.

On a regional basis the largest number of farm sales during the three months to September was again in Canterbury with 23 properties sold although Southland was close behind with 22 farms sold. Otago was the next highest recording 19 farms sold, followed by Waikato and Bay of Plenty with both recording 16 farms sold.

Median prices for farms increased in six out of the 14 districts in the three months to September 2010 compared with the three months to August 2010, farm sale prices were up in Waikato from $1,187,500 to $1,380,000, Hawkes Bay from $945,000 to $1,450,000, Manawatu/Wanganui from $1,200,000 to $1,256,000, Wellington from $1,935,000 to $2,037,500, Nelson from $1,092,500 to $1,425,000, and Southland from $1,125,000 to $1,162,500.

“The total number of farm sales in Southland for the three months to September 2010 was 22, which is down on the three months to August of 27 but this could be attributed to the massive snowfalls last month,” says Mr Thomson.

The number of sales of lifestyle properties remained relatively steady at 1039 for the three months to September 2010, compared to 1066 for the three months to August. The median selling prices was also relatively stable at $427,500, compared to $436,750 for the three months to the end of August and $430,000 for the three months to September 2009.

ENDS

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