Strong Sales Volume Growth In Rural Property Sector

19 March 2012

Strong Sales Volume Growth Continues In Rural Property Sector

Data released today by the Real Estate Institute of NZ (“REINZ”) shows there were 147 more farm sales (+72.1%) for the three months ended February 2012 than for the three months ended February 2011. Overall, there were 351 farm sales in the three months to end of February 2012, compared with 204 farm sales in the three months to February 2011. The number of sales fell by 3 (-0.8%) in the three months to February 2012 compared to the three months ended January 2012. 1,295 farms were sold in the year to February 2012, the highest number of farm sales on an annual basis since May 2009.

The median price per hectare for all farms sold in the three months to February 2012 was $21,641; a 6.6% increase on the $20,299 recorded for three months ended January 2012 and up $375 per hectare on the $21,266 recorded for the three months to February 2011.

All regions, apart from Taranaki, recorded increases in sales volumes for the three months ended February 2012 compared to the three months ended February 2011. Canterbury recorded the largest increase in sales (+35 sales), followed by Waikato (+31 sales) and Manawatu/Wanganui (+20 sales). Taranaki recorded one fewer sale in the three months to February 2012 compared to the three months to February 2011. Compared to the three months ended January 2012 six regions recorded increases in sales, seven recorded decreases in sales and one had steady sales.

“There has been a marginal easing in the number of sales for the three months ended February, although the underlying trend is still improving,” says REINZ Rural Market Spokesman Brian Peacocke. “Buyers remain focused on grazing, fattening and dairy properties with indications of a shortage of listings coming through due to the number of transactions that have taken place over the past few months.”

“Of note are sales in February of a large dairy farm in Southland, incorporating a grazing unit for $29 million, and a quality kiwifruit orchard in the Bay of Plenty for $170,000 per canopy hectare, which suggests reviving interest for quality properties in the kiwifruit sector.”

“Morale in the rural sector remains high, with the impact of lower product prices being offset by the increase in production from one of the best growing seasons experienced for many years.”

Included in sales for the month of February were 21 dairy farms at an average sale value of $34,053 per hectare. The average farm size was 153.3 hectares with a range of 57 hectares in Waikato to 898 hectares in Southland. The average production per hectare across all dairy farms sold in February 2012 was 944 kgs of milk solids.

Grazing properties accounted for the largest number of sales with 51.3% share of all sales over the three months. Finishing properties accounted for 18.8%, Dairy properties 17.4%, and Arable properties 4.3%. These four property types accounted for 91.8% of all sales during the three months ended February 2012.

For the three months ended February the median sales price per hectare for dairy farms was $34,223 (61 properties), compared to $34,298 for the three months ended January 2012 (58 properties), and $36,687 (50 properties) for the three months ended February 2011. The median dairy farm size for the three months ended February 2012 was steady at 114 hectares.

For the three months ended February 2012 the median sales price per hectare for finishing farms was $22,203 (66 properties), compared to $21,080 for the three months ended January 2012 (64 properties), and $8,953 (18 properties) for the three months ended February 2011. The median finishing farm size for the three months ended February 2012 was steady at 73 hectares.

For the three months ended February 2012 the median sales price per hectare for grazing farms was $14,880 (180 properties) compared to $13,601 for the three months ended January 2012 (182 properties), and $13,569 (84 properties) for the three months ended February 2011. The median grazing farm size for the three months ended February 2012 was 79 hectares.

For the three months ended February 2012 the median sales price per hectare for horticulture farms was $202,500 (14 properties) compared to $140,000 (17 properties) for the three months ended January 2012, and $129,310 (21 properties) for the three months ended February 2011. The median horticulture farm size for the three months ended February 2012 was 3 hectares.

The lifestyle property market also saw a 33.6% increase in sales in the three months to February 2012 compared to February 2011. 1,243 sales were recorded in the three months to February 2012 compared to 930 sales in the three months to February 2011. 12 more sales were recorded compared to the three months to January 2012 (+2.5%).

Nine regions recorded increases in sales compared to December while five recorded falls. Wellington recorded the largest increase (+13 sales), followed by Northland (+9 sales) and Taranaki (+7 sales). Canterbury recorded the largest drop in sales (-22 sales), followed by Auckland (-8 sales) and Nelson (-6 sales).

The national median price for lifestyle blocks eased by $5,000 (-1.1%) from $470,000 for the three months to January to $465,000 for the three months to February. Compared to three months to February 2011 the median price increased by $29,500 (+6.8%).

Commenting on the lifestyle property market statistics Brian Peacocke said, “Sales volume in the lifestyle sector continues to increase, although rising vendor price expectations in some areas are creating obstacles for some purchasers.”

Real Estate Institute of New Zealand
For more real estate information and market trends data, visit www.reinz.co.nz. For New Zealand's most comprehensive range of listings for residential, lifestyle, rural, commercial, investment and rental properties, visit www.realestate.co.nz - REINZ's official property directory website.

The information provided by REINZ in relation to the rural real estate market covers the most recently completed three month period; thus references to February refer to the period from 1 December 2011 to 29 February 2012.

Click here for REINZ Statistics for February 2012.

ENDS

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