Farm sales set to fall as stellar season ends
BUSINESSDESK: The Real Estate Institute is warning of a slowdown in farm sales as seasonal conditions look set to sour, ending the best quarterly sales period since August 2008.
The number of farms sold rose 53% to 443 in the three months ended April 31, up from 290 a year earlier, the institute says.
The median price per hectare for all farms sold rose 3.8% to $17,938.
"The earlier confidence arising from the very good season just past is being replaced by a distinct note of caution as purchasers take account of recent reductions in market returns for dairy products, mutton and lamb," institute rural market spokesman Brian Peacocke said.
"Expectations are for the market to continue to slow as we move into winter. There is an acknowledgment that income levels are likely to be down for the forthcoming season."
A strong kiwi dollar and falling prices for locally produced raw materials are set to weigh on the rural sector after uncharacteristically good weather stoked production last year.
That has prompted Bank of New Zealand economists to warn export receipts may drop by $3 billion over the coming year, weighing on farmers' incomes.
The institute said all regions except Hawke's Bay and Otago recorded an increase in sales in the April quarter compared to a year earlier.
Waikato showed the largest increase in sales, up 32, followed by Canterbury with an extra 28.
Hawke's Bay dropped five sales, while in Otago they fell by four.
Grazing properties accounted for the largest increase in sales, rising 53% in the three-month period. That was followed by finishing properties, climbing 16%, and dairy farms, up 15%.
Lifestyle property sales rose by about 29%.