Rural Property Market Remains Quiet

Rural Property Market Remains Quiet

Farm sales have fallen to fewer than half the numbers achieved in recent years but the median sale price is up on the same time last year according to the latest Real Estate Institute of New Zealand (REINZ) Rural Market Report released today.

“Turnover in the rural property market is mirroring what is happening with residential sales and is continuing the trend over the last three months,” says Real Estate Institute of New Zealand spokesperson Bryan Thomson.

“While the whole rural market is very quiet, with the positive outlook internationally for milk products we are starting to a see a new lift in interest in dairy farms,” says Mr Thomson. “But buyers are being very price sensitive so vendors still expecting to realize the values of two and three years ago will continue to be disappointed.”
In the three months to the end of October 2010 only 147 farms changed owners, a 28.3 per cent drop on the 205 sold in the same three months last year, and also a decrease on the 164 sold in the three months to September 2010 and the 192 sold in the three months to August 2010. Compared to the 390 farms sold in the three months to October 2008, and the 582 sales in the three months to October 2007, the decline in activity in the rural property market is even more marked.

From $1,012,500 in the three months to September 2010, the national median farm sale price eased back to $950,00 for the three months to October 2010. This is an increase on the median of $875,000 for the same period last year, but still well down on the median of $1,500,000 for the equivalent period in 2008.

Only 8 dairy farms were sold in the three months to October and the median price fell from $3,163,121 at the end of September to $1,700,000 for the three months to the end of October. However one of the four dairy farm transactions in October was a leasehold property so the selling price was considerably lower than if it had been freehold. Despite the impact of the leasehold transaction on the REINZ rural property market statistics the average price per kilogramme of milk solids recovered from $30 in September 2010 to $33 in October 2010 the same as in August.

On a regional basis the most farm sales were in Manawatu/Wanganui with 21 during the three months to October. Canterbury was second with 19 farms sold and the Bay of Plenty the next highest with 16.

As well as the decline in the number of sales, median prices for farms fell in 9 out of the 14 districts in the three months to October 2010 compared to the three months to September 2010. While across the country the median price for the three months ending October 2010 is up $75,000 on the same three months in 2009, during the past year median prices for farms have declined in 7 out of the 14 districts.

For the three months to October 2010 compared to the corresponding period in 2009, farm sale prices were down in Auckland from $903,000 to $613,000, Waikato from $1,462,500 to $1,400,000, Bay of Plenty from $1,000,000 to $962,500, Hawkes Bay from $1,200,000 to $856,000, Taranaki $1,000,000 to $390,000, Manawatu/Wanganui from $1,190,000 to $1,145,000, and Wellington from $1,810,000 to $1,000,000. However when compared to the same three months to October 2009 there have been increases in median prices this year in Northland (from $490,000 to $741,250), Gisborne (from $850,000 to $1,240,000) and all the South Island regions (Nelson from $700,000 to $$1,565,000, West Coast from $103,634 to $677,500, Canterbury from $995,000 to $1,000,000, Otago from $527,500 to $670,000 and Southland from $641,500 to $1,125,000) .

Sales of lifestyle properties increased slightly from 1039 for the three months to September 2010, to 1053 for the three months to October 2010. But at $425,000, the median selling price has continued to slip back from $427,500 at the end of September and $436,750 for the three months to the end of August and $445,000 for the three months to the end of October 2009.
ENDS

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