Rural Sales Volumes Continue Rising Steadily

News Release 14 October 2011

Rural Sales Volumes Continue Rising Steadily on Annualised Basis

Data released today by the Real Estate Institute of NZ (“REINZ”) shows there were 93 more sales (+56.7%) for the three months ended September 2011 than for the three months ended September 2010. Overall, there were 257 farm sales in the three months to end of September 2011 compared with 164 sales in the three months to September 2010. The number of sales fell by eight (-3.0%) in the three months to September 2011 compared to the three months ended August 2011.

The median price per hectare for all farms sold in the three months to September 2011 was $17,694 compared to $15,148 in the three months to August 2011 and $17,447 for the three months to September 2010.

The number of sales for the 12 months to September 2011 was 1,053, the largest number of sales in over two years. Eight regions recorded increases in sales volume for the three months ended September, with Wellington recording the largest increase (+7 sales), followed by Auckland and Northland (+4 sales each). Six region recorded lower sales with Southland recording the largest fall (-11 sales) followed by Otago (-9 sales) and West Coast (-6 sales).

“Sales volumes to date reflect the early spring period, with many marketing programmes just commencing. The early signs indicate higher expectations for volumes and prices as market momentum increases,” says REINZ Rural Market Spokesman Brian Peacocke. “The supply of listings in some areas is becoming short, although overall the volume of properties available is higher than at the same time last year.”

“The excellent early spring conditions, and for many the best growing conditions in years, combined with strong income levels is generating cautious optimism in the rural sector that is being reflected by the banks increased appetite for lending to farmers,” said Mr Peacocke.

Included in sales for the month of September were four dairy farms at an average sale value of $32,334 per hectare. The average farm size was 138 hectares with a range of 96 hectares in the Waikato to 241 hectares in Southland. The average production per hectare across all dairy farms sold in September 2011 was 565 kgs of milk solids.

Grazing properties accounted for the largest number of sales with 56.0% share of all sales over the three months. Dairy and Horticulture properties accounted for 7.4% each, Finishing properties 14.0% and Arable properties 5.1%. These five property types accounted for 89.9% of all sales during the three months ended September 2011.

For the three months ended September 2011 the median sales price per hectare for dairy farms eased back almost $1,400 per hectare to $29,668 (19 properties) compared to the three months ended August 2011 at $31,050 (28 properties), and $37,634 (12 properties) for the three months ended September 2010. The median dairy farm size for the three months ended September 2011 was 185 hectares.

For the three months ended September 2011 the median sales price per hectare for finishing farms was $18,735 (36 properties) compared to $14,557 for the three months ended August 2011 (44 properties), and $9,735 (19 properties) for the three months ended September 2010. The median finishing farm size for the three months ended September 2011 was 107 hectares.

For the three months ended September 2011 the median sales price per hectare for grazing farms was $12,330 (144 properties) compared to $10,294 for the three months ended August 2011 (140 properties), and $15,691 (96 properties) for the three months ended September 2010. The median grazing farm size for the three months ended September 2011 was 68 hectares.

For the three months ended September 2011 the median sales price per hectare for horticulture farms was $82,000 (19 properties) the same as for the three months ended August 2011 (15 properties), and $138,335 (20 properties) for the three months ended September 2010. The median horticulture farm size for the three months ended September 2011 was 10 hectares.

The lifestyle property market also saw a further easing in the number of sales in the three months to September 2011 compared to the three months to August 2011. 1,261 sales were recorded in the three months to September, down 43 (-3.3%) on the three months to August 2011, but up 222 (+21.4%) compared to the three months to September 2010. Canterbury recorded the largest increase in sales volume in September with a rise of 14 sales to 252, however, most regions either had flat or a slight decline in the number of sales.

The national median price also eased further, dropping $14,000 from $444,000 for the three months to August to $430,000 for the three months to September. Compared to three months to September 2010 the median price increased by $2,500.

Commenting on the lifestyle property market statistics Brian Peacocke said, “The lifestyle property market remains patchy and variable from region to region. The level of activity is indicative of the general economic mood, but there is a sense of people holding back waiting to see how the market develops.”

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