Sales in rural property almost doubled
Promising and productive weather has provided a solid platform for rural property sales and sales figures have rocketed.
Statistics released by the Real Estate Institute of New Zealand (REINZ) show for the three-month period ending October 2011 sales increased by 94.6% on the same three months last year. 286 farms were sold compared to 147 in 2010.
This increase was because there were a lot more rural properties available on the market REINZ rural market spokesman Brian Peacocke says.
This increase in properties for sale is attributable to three factors Mr Peacocke says.
“The payout level is quite good, acknowledging the 45c Fonterra dropped off recently it hasn’t really changed the outflow to any great extent.
“There’s the fact interest rates are still at a sensible level.
“Thirdly it’s been a very good season, this spring following on from a very good autumn. All the factors are in the right boxes meaning its one of the best times people have been able to put their property on the market for a number of years and they’re taking advantage of that,” he says.
Eight more dairy farms were sold (17) in the three-month period ending October 2011 compared to the same period in 2010 but overall sales figures remained low.
The median price per hectare for dairy farms increased $1860 from the three-moth period ending October 2010 to $29,668 to the same 2011 period. Median hectare prices were stable with no change in price for the three-month periods ending September 2011 and October 2011.
168 grazing properties were sold in the three-month period ending October 2011 compared to 88 on the same period in 2010. Median prices per hectare increased to $16,013 from $14,972 for the same periods.
Grazing properties still represented the majority of the market with over 500 grazing properties sold compared to 150 odd dairy farms over the last 12 months excluding this month Mr Peacocke says.
“The sheep and beef industry is in pretty reasonable heart and when things are going well trading increases, the other thing is when the dairy industry is in good heart then a number of people buy support properties to run alongside their dairy operations.
“Often it’ll be a grazing type property suitable for running replacement stock on or growing maize to winter cows on,” he says.
An easing in the lifestyle property market is because buyers are being cautious in the current economy Mr Peacocke says.
Sale figures dropped 64 (-5.1%) from the three-month period ending September 2011 to the three months ending October 2011. While sales dipped the median price for lifestyle blocks went up $5,000 to $435,000 for the same two three-month periods.
Grazing properties accounted for the largest number of sales with 58.7% share of all sales over the three months. Finishing properties accounted for 15.0%, Horticulture properties 7.7% and Dairy properties 5.9%. These four property types accounted for 87.3% of all sales during the three months ended October 2011.