2003 Rural Property Market Easing But Outshines 02

2003 Rural Property Market Easing – But Still Outshines 2002

The rural property market is feeling the effect of a cautious rural sector, one that is currently striving to gauge the degree to which external factors such as the impact of the exchange rate on commodity prices, the Iraqi War and SARS will have on the rural economy, according to Mr Murray Cleland, rural spokesperson for the Real Estate Institute of New Zealand.

Rural property values for August have fallen on a month-to-month basis, but firmed on year-to-year comparison, while the number of sales increased from last August but fell from last month. The national median farm sale price for August was $540,000 compared to July at $680,000, and the August 2002 median of $487,000. The national sales volume for farms in August was 175, compared to the July sales volume of 206 and the August 2002 volume of 156.

Mr Cleland said that the latest figures are consistent with both a seasonal slowing and economic factors that have had more impact on the rural economy than that of the urban centres. He stressed however, that the outlook for the sector was bright.

He said, “The results for August are still very robust in comparison to 2002 and long term observers of movements in rural property understand that year-to-year comparison is the key to assessing rural property. What is evidenced by the slow downturn during 2003 is that the rural sector is less bullish than in 2002, and that the commodity prices forecast for 2003/2004 have been down on those for 2002.

“The international economic picture is more positive than in the first two quarters of 2003, and will lend some stability to the New Zealand rural economy. The Institute believes that the rural sector will stabilise once it has a more concrete picture of what the next twelve to eighteen months will bring.”

“At the end of the day, the national median price rose 10.88 per cent from last August – up by $53,000. There are still very strong indications that the rural property market is in very good health.”

On month-to-month comparison, of the fourteen districts surveyed, farm sales decreased in nine areas, while only four regions experienced a drop in sales volume on a year-to-year basis.

On month-to-month and year-to-year comparison, the lifestyle block market has firmed in both activity and in median sales price. The 682 sales recorded during August 2003 was up from both July’s 675 sales and the 533 sales recorded in August 2002. The median sales price firmed almost $9,000 from last month (July 2003: $248,000) and nearly $42,000 from last year (August 2002: $215,000) to $256,750 in August 2003.

The demand for dairy properties eased on a month-to-month basis but was well improved on August 2002. Thirteen properties changing hands during August, compared to 27 in July 2003 and nine in August 2002.

Dairy property values fell from last month and last year, with the August 2003 median sale price for dairy properties at $1,000,000, down from the $1,400,000 recorded in July 2003 and the $1,355,000 recorded in August 2002.

The horticultural property national median price rose on a year-to-year and month-to-month comparison, with 26 sales at a median of $600,000 in August compared to 28 sales at $563,500 in July 2003 and 35 sales at a median of $530,000 in August 2002.

Finishing property sales eased on a month-to-month basis, but firmed on year-to-year comparison, with 18 sales in August 2003 compared to 25 in July 2003 and 16 sales in August 2002. The median price fell from last year and last month with $637,500 recorded in August 2003 and $838,125 in July 2003, compared to $852,500 in August 2002.

Ninety-seven grazing properties sold in August, fourteen less than the 111 sales in July and twelve more than the 85 sales recorded in August 2002. The median sale price of $450,000 was down from both the $605,000 recorded in July 2003 and up on the median price of $435,000 in August 2002.

The arable property national median price fell on a month-to-month basis but rose on year-to-year comparison, with three sales at a median of $930,650 in August compared to five sales at a median of $1,320,000 in July 2003 and six sales at a median of $562,500 in August 2002.

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