Data released today by the Real Estate Institute of New Zealand (REINZ) shows there were 105 less farm sales (-24.6%)
for the three months ended June 2019 than for the three months ended June 2018. Overall, there were 322 farm sales in
the three months ended June 2019, compared to 380 farm sales for the three months ended May 2019 (-15.3%), and 427 farm
sales for the three months ended June 2018. 1,342 farms were sold in the year to June 2019, 9.3% fewer than were sold in
the year to June 2018, with 37.4% less Dairy farms, 5.9% more Grazing farms, 14.2% less Finishing farms and 18.8% less
Arable farms sold over the same period.
The median price per hectare for all farms sold in the three months to June 2019 was $22,044 compared to $21,745
recorded for three months ended June 2018 (+1.4%). The median price per hectare decreased 0.9% compared to May 2019.
The REINZ All Farm Price Index rose 2.4% in the three months to June 2019 compared to the three months to May 2019.
Compared to June 2018 the REINZ All Farm Price Index rose 7.3%. The REINZ All Farm Price Index adjusts for differences
in farm size, location and farming type, unlike the median price per hectare, which does not adjust for these factors.
Only one of the 14 regions recorded an increase in the number of farm sales for the three months ended June 2019
compared to the three months ended June 2018 - Gisborne (+7). Waikato recorded the most substantial decline in sales
(-18 sales) followed by Bay of Plenty (-15 sales). Compared to the three months ended May 2019, two regions recorded an
increase in sales with the biggest increase being in Southland (+4 sales).
Brian Peacocke, Rural Spokesman, at REINZ says: “Sales data for the 3 month period ending June 2019 confirms numbers of
farm sales for the most recent quarter are at their lowest level for at least the last 4 – 6 years.
“By contrast, the slight rise in farm sale values as indicated by the All Farm Price Index as opposed to the decrease in
the Dairy Farm Price Index indicates the non-dairy sector is holding value more strongly than the dairy sector.
“On the rural front, winter has been kind with warmer temperatures and well spread rain over much of the country, albeit
not all regions, which has allowed for reasonable pasture growth and a much needed recovery from an extended
summer/autumn dry spell.
“Product prices for beef, lamb and horticultural products remain strong and are improving, and while indications for
dairy seem reasonable, volatility in that sector remains a constant.
“The recent drop in log prices of between 15% - 20%, predominantly related to the Chinese market, is a reminder of
becoming too dependent on one market, particularly one that has taken approximately 42% of our lamb exports this year,
plus a significant amount of our beef and horticultural production for the season. The need for market diversity is also
a constant.
“The current level of interest rates continues to be an attraction for borrowers but reports from around the country
confirm a tightening of lending criteria from banks across the board, irrespective of due diligence and equity criteria
being fulfilled, to the extent that a strong degree of caution continues to prevail within the farming sector.
“Factors surrounding compliance issues, climate control, carbon credits and the expansion of forestry into the pastoral
sector continues to exacerbate the mood of concern that hovers over the rural horizon,” he concludes.
Points of Interest around New Zealand include:
•Northland/Auckland - minimal dairy activity; light sales volumes of finishing, grazing and horticultural properties; most farmers
currently focusing on the forthcoming season with calving and lambing now coming to the fore
•Waikato - light activity in the dairy sector where a number of farmers took winter holiday opportunities; sufficient volumes of
finishing and grazing property sales to register; good winter grass growing conditions throughout the province
•Bay of Plenty/Central Plateau - an easing of sales volumes in the horticultural industry but one particularly significant sale of a large kiwifruit
orchard in the Whakatane district where top quality provided strong value in excess of $45m; a solid sale for a deer
unit in the Tauranga area, but zero activity in the other land use sectors
•Taranaki - winter paralysis within the dairy industry and light sales volumes for finishing and grazing units
•Manawatu/Wanganui - well spread sales of finishing and grazing units plus one good arable property, with a particularly strong flourish of
sales in the Tararua district, including a quality deer farm at sensible money
•Wairarapa/Wellington - quiet in the main but some light activity on grazing units in the south and west of the district
•Nelson/Marlborough - a little bit of everything during June with no one sector standing out; confidence quietly building for the spring
•Canterbury/West Coast - some good strong sales of finishing properties albeit mainly smaller units; one dairy farm sale on the West Coast but
generally harder throughout the province in that sector; reports of banks being constrained with their lending appetite
•Otago - light sales volumes of dairy, finishing and grazing units with further reports of banks being increasingly harder
with their lending criteria; considerable early activity with forestry interests pursuing investment opportunities
within the more marginal store-stock areas, such interest emanating from both local and off-shore sources
•Southland - sales figures confirm light results in the dairy and grazing sectors, but good results at solid prices across the
board for finishing properties, albeit a number of smaller units; interest predominantly local, either from adjoining
land owners or from those within reasonably close proximity.
Grazing farms accounted for the largest number of sales with a 36% share of all sales over the three months to June
2019, Finishing farms accounted for 26%, Horticulture accounted for 16%, and Dairy properties accounted for 11% of all
sales. These four property types accounted for 89% of all sales during the three months ended June 2019.
Dairy Farms
For the three months ended June 2019, the median sales price per hectare for dairy farms was $25,028 (34 properties),
compared to $31,248 (39 properties) for the three months ended May 2019, and $31,881 (57 properties) for the three
months ended June 2018. The median price per hectare for dairy farms has decreased 21.5% over the past 12 months. The
median dairy farm size for the three months ended June 2019 was 164 hectares.
On a price per kilo of milk solids basis the median sales price was $31.76 per kg of milk solids for the three months
ended June 2019, compared to $32.17 per kg of milk solids for the three months ended May 2019 (-1.3%), and $33.37 per kg
of milk solids for the three months ended June 2018 (-4.8%).
The REINZ Dairy Farm Price Index fell 0.8% in the three months to June 2019 compared to the three months to May 2019.
Compared to June 2018, the REINZ Dairy Farm Price Index fell 1.1%. 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 June 2019, the median sale price per hectare for finishing farms was $30,920 (84 properties),
compared to $30,908 (95 properties) for the three months ended May 2019, and $26,245 (120 properties) for the three
months ended June 2018. The median price per hectare for finishing farms has risen 17.8% over the past 12 months. The
median finishing farm size for the three months ended June 2019 was 33 hectares.
Grazing Farms
For the three months ended June 2019, the median sales price per hectare for grazing farms was $10,881 (117 properties)
compared to $10,572 (139 properties) for the three months ended May 2019 and $10,113 (143 properties) for the three
months ended June 2018. The median price per hectare for grazing farms has risen 7.6% over the past 12 months. The
median grazing farm size for the three months ended June 2019 was 135 hectares.
Horticulture Farms
For the three months ended June 2019, the median sales price per hectare for horticulture farms was $262,490 (50
properties) compared to $281,384 (62 properties) for the three months ended May 2019 and $279,543 (57 properties) for
the three months ended June 2018. The median price per hectare for horticulture farms has fallen 6.1% over the past 12
months. The median horticulture farm size for the three months ended June 2019 was 7 hectares.