Encouraging Conclusion to Selling Season

News Release 18 June 2013

Encouraging Conclusion to Selling Season

Summary

Data released today by the Real Estate Institute of NZ (“REINZ”) shows there were 69 more farm sales (+15.6%) for the three months ended May 2013 than for the three months ended April 2013. Overall, there were 512 farm sales in the three months to end of May 2013, compared to 467 farm sales for the three months ended May 2012 (+9.6%) and the highest number of farm sales for May since 2008. 1,490 farms were sold in the year to May 2013, 6.6% more than were sold in the year to May 2012.

The median price per hectare for all farms sold in the three months to May 2013 was $20,499; a 20.4% increase on the $17,031 recorded for three months ended May 2012. The median price per hectare rose 1.3% compared to April.

The REINZ All Farm Price Index increased by 0.7% in the three months to May compared to the three months to April, from 2,946.57 to 2,968.49. Compared to May 2012 the REINZ All Farm Price Index rose by 0.9%. The REINZ All Farm Price Index adjusts for differences in farm size, location and farming type compared to the median price per hectare, which does not adjust for these factors.

Six regions recorded increases in sales volume for the three months ended May 2013 compared to the three months ended May 2012. Waikato recorded the largest increase in sales (+28 sales), followed by Auckland (+20 sales) and Northland (+13 sales). Eight regions recorded decreases in sales volume with Southland recording the largest fall (-11 sales), followed by Nelson (-9 sales) and Canterbury (-7 sales). Compared to the three months ended April 2013 11 regions recorded an increase in sales, lead by Canterbury (+13 sales).

“Sales in the dairy sector for the season concluded on a solid note with continued strong demand for good properties. The number of dairy sales for the year ending May 2013 was strongly ahead of the previous year and reflects an increasing degree of confidence within the dairy industry,” says REINZ Rural Market Spokesman Brian Peacocke.

“Increasing confidence is also apparent in the drystock sector with healthy sales volumes of finishing and grazing properties, particularly in Canterbury, Otago and Southland in the South Island, and Waikato, Tarakani and Manawatu/Wanganui in the North Island.”

“The focus in the red meat sector on the potential for rationalisation or restructuring of the meat processing industry has not dampened demand for quality sheep and beef properties.”

Grazing properties accounted for the largest number of sales with 45.9% share of all sales over the three months to May Dairy properties accounted for 17.6%, Finishing properties accounted for 20.7% and Horticulture properties accounted for 7.0% of all sales. These four property types accounted for 91.2% of all sales during the three months ended May 2013.

Dairy Farms
For the three months ended May 2013 the median sales price per hectare for dairy farms was $34,850 (90 properties), compared to $34,819, for the three months ended April (87 properties), and $29.485 (60 properties) for the three months ended May 2012. The median dairy farm size for the three months ended May 2013 was 124 hectares.

Included in sales for the month of May were 19 dairy farms at a median sale value of $34,932 per hectare. The median farm size was 94 hectares with a range of 44 hectares in the Waikato to 442 hectares in Southland. The median production per hectare across all dairy farms sold in May 2013 was 995kgs of milk solids.

The REINZ Dairy Farm Price Index rose by 0.4% in the three months to May compared to the three months to April, from 1,761.16 to 1,768.80. Compared to May 2012 the REINZ Dairy Farm Price Index fell by 4.6%. The REINZ Dairy Farm Price Index adjusts for differences in farm size and location compared to the median price per hectare, which does not adjust for these factors.

Finishing Farms
For the three months ended May 2013 the median sales price per hectare for finishing farms was $17,903 (106 properties), compared to $20,293 for the three months ended April (83 properties), and $15,889 (82 properties) for the three months ended May 2012. The median finishing farm size for the three months ended May 2013 was 68 hectares.

Grazing Farms
For the three months ended May 2013 the median sales price per hectare for grazing farms was $13,443 (235 properties) compared to $12,900 for the three months ended April (205 properties), and $13,496 (250 properties) for the three months ended May 2012. The median grazing farm size for the three months ended May 2013 was 59 hectares.

Horticulture Farms
For the three months ended May 2013 the median sales price per hectare for horticulture farms was $128,248 (35 properties) compared to $118,119 (31 properties) for the three months ended April, and $136,643 (26 properties) for the three months ended May 2012. The median horticulture farm size for the three months ended May 2013 was six hectares.

Lifestyle Properties
The lifestyle property market saw a 16.4% (+260 sales) increase in sales volume in the three months to May 2013 compared to May 2012. 1,844 sales were recorded in the three months to May 2013 compared to 1,584 sales in the three months to May 2012. 148 more sales were recorded compared to the three months to April 2013 (+8.7%). For the 12 months to April 2013 there were 6,150 unconditional sales of lifestyle properties, an increase of 15.0% over the 12 months to May 2012.

10 regions recorded increases in sales compared to May 2012 while four recorded decreases in sales. Auckland recorded the largest increase (+152 sales), followed by Waikato (+58 sales) and Canterbury (+36 sales). Compared to April 2013, 13 regions recorded increases in sales with one region recording a decrease. Auckland recorded the largest increase in sales (+36 sales), followed by Waikato (+25 sales) and Hawkes Bay (+19 sales).

The national median price for lifestyle blocks rose by $34,500 (+7.3%) from $475,000 for the three months to May 2012 to $509,500 for the three months to May 2013. The median price for lifestyle blocks in Auckland rose by 12.6% in the year to May 2013, and rose by 9.7% in Waikato, however, the median price only rose by 1.2% in Canterbury.

The number of days to sell for lifestyle properties improved by five day, from 72 days for the three months to the end of April to 67 days for the three months to the end of May. Compared to the three months ended May 2012 the number of days to sell improved by 16 days from 83 days to 67 days. Canterbury and Gisborne recorded the shortest number of days to sell in May at 45 days, followed by Southland at 46 days and Auckland at 59 days. Bay of Plenty recorded the longest number of days to sell at 102 days, followed by Northland at 95 days and Hawkes Bay at 86 days.

Commenting on the lifestyle property market Brian Peacocke said, “Increasing confidence in the lifestyle sector is seeing increasing sales volumes around Auckland and Christchurch, as well as in the Waikato, although smaller provincial centres report a tightening of the market with reasonable activity up to $600,000 but reduced activity above that.”

“Across the country cautious optimism is being expressed that buoyancy in the rural sector will push positive cash flows into the wider economy.”

REINZ All Farm Price Index – Additional Data
The table below sets out the returns for the REINZ All Farm Price Index for the three months ending May 2013.

The graph below shows the trends in the REINZ All Farm Price Index compared to an index of movements in the $/hectare measure of farm prices.

REINZ Dairy Farm Price Index – Additional Data
The table below sets out the returns for the REINZ Dairy Farm Price Index for the three months ending May 2013.

The graph below shows the trends in the REINZ Dairy Farm Price Index compared to an index of movements in the $/hectare measure of farm prices.

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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.
Editors Note:
The information provided by REINZ in relation to the rural real estate market covers the most recently completed three month period; thus references to July refer to the period from 1 December 2012 to 28 February 2013.
The REINZ Farm Price Indices have been developed in conjunction with the Reserve Bank of New Zealand. It adjusts sale prices for property specific factors such as location, size and farm type which can affect the median $/hectare calculations and provides a more accurate measure of farm price movements. The REINZ Farm Price Indices has been calculated with a base of 1,000 for the three months ended March 1996. The REINZ Farm Price Indices is best utilised in assessing percentage changes over various time periods rather than trying to apply changes in the REINZ Farm Price Index to specific property transactions.

[Attached: REINZ_Rural_Market_Statistics__May_2013.pdf]

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