Rural property market bouyant

News release
September 12, 2007

Rural property market bouyant

Demand for rural properties is soaring as a buoyant agriculture sector eyes opportunities for expansion and new players consider a future in farming.

While the residential property marketing is showing signs of slowing, with sales volumes at a seven year low according to industry figures released this week, there is no evidence of a slow-down in the rural real estate market.

“Market activity is very strong,’’ says Shane O’Brien of Bayleys Canterbury, which is one of the leading sellers of rural real estate in New Zealand.

“The state of New Zealand agriculture, in terms of the medium to long-term outlook for the future, is probably the best it’s been since the 1950s. Commodity prices are high and the indicators point to continued growth in our key markets. Dairy farmers are about to get a huge payout from Fonterra and they are feeling very confident.

“That’s reignited the property market and what we’re seeing at the moment is a significant increase in demand for good rural properties,’’ Mr O’Brien says.

Among those driving up the demand are existing dairy farmers who want to expand their holdings, either by way of syndicates or outright purchases.

Other sectors of the agricultural industry though are also feeling optimistic about the future and a number of sheep and beef farmers are also looking to expand their holdings.

Mr O’Brien says demand is particularly high for rural land in Central and Mid Canterbury.

While inevitably the high level of demand will impact on values, Mr O’Brien says buyers still tend to be wary of paying over-the-odds for property: “The values paid are still governed by the return they can expect off the land.’’

ENDS

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