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Spring 2017 Property Pull-Out October 23, 2017
farmersweekly.co.nz
Market picking up
Alan Williams alan.williams@nzx.com
R
URAL real estate sales were down by nearly a third in the latest three-month period because of waterlogged pasture in many parts of the country but signs are pointing to a pick-up. A considerable number of farms were now coming forward or would be soon but marketing projects had been pushed back about two to three weeks compared to usual trends, Real Estate Institute rural spokesman Brian Peacocke said. “This is from early October to late October and then you might be into late November to early December to get it done.” An interesting spring was emerging along with potential listings as more landowners considered their options, he said. Labour, climate, environ-
mental issues and politics were among the driving factors for decisions being made by some older farmers. The number of farm sales in the three months ended September 30 was 271, down 30% on the 388 tally the same time a year earlier. There were 311 sales in the three months to the end of August this year. That was usually the slow time of the year, with farmers busy with lambing and calving but the drop in sales was significant in such a period of terrible weather. Eleven of the 14 sales regions had falls in the number of sales, led by Nelson and Auckland. There had been some activity around the soughtafter Matamata-Piako area in Waikato with one dairy farm at Matamata selling for a very good $66,000/ha, Peacocke said. “Rural morale has been severely tested but the redeeming feature of a strengthening milk payout,
stable interest rates and steady exchange rate environment have provided light at the end of the tunnel – an increase in sunshine would be the bonus.” The wet September had been frustrating for dairy and arable farmers and agricultural contractors unable to get machinery onto farmland. For the year-ended September 30, there were 1667 farms sold, down 6.6% on the previous year, though there were 43% more finishing farms and 31% more dairy farms sold, with falls for grazing and arable properties. The median price for the three-month period to September 30 was $27,363/ ha, up from $26,825/ha a year earlier but slightly down on the latest August period. The institute’s All Farm Index rose by 10.6% year-on-year. The index adjusted for farm size, location and farming type whereas the median figure did not. For dairy farms, the median sales price for the September
period was $37,812/ha over 22 properties, about steady with the $37,842/ha for 26 properties in August but up on $33,132/ha for the September 2016 period. The median price was up 14% year-on-year but the institutes’s Dairy Farm Price Index fell 6.5% year-on-year. The index was the more accurate guide and people were watching the political scene closely. There were indications of imminent listings of some second-tier dairy farms in the Waipa area of Waikato and that would create interest as that part of the market was not really tested last season. Overall, during the sales period, talk of water taxes was a concern in South Island areas depending on irrigation and talk of capital gains taxes was a well-publicised concern around the country. The median price for finishing farm sales was $30,828/ha for the three-months, pretty steady on the August period but
well up on the $26,834/ha for September 2016, a 15% year-onyear gain. There were steady sales in Northland, Auckland and Waikato and an increase in Nelson and Canterbury. However, Canterbury reports indicated transactions were taking longer and banks were being more restrictive. Northland also had good grazing property sales volumes though most other areas had reduced activity. The median price for grazing farm sales was $12,031/ha, higher than the August figure of $11,355 but well behind the $15,339/ha of September last year. That was a year-on-year fall of 22%. Horticulture property prices were generally higher, up 6.4% year-on-year, to a median $189,044/ha from $177,726. Activity was centred on Northland, Hawke’s Bay and Nelson with continuing interest in smaller orchards in Bay of Plenty.