Rural Property Market Dips

Rural Property Market Dips

The rural property market continues to dip on the back of ongoing low dairy farm sales, as seen in the latest figures released today by the Real Estate Institute of New Zealand (REINZ).

Real Estate Institute of New Zealand President Peter McDonald says the total number of farms sold in the three months to January 2010 was down to 208. This compares with 305 and 732 farms sold in the three months to January 2009 and January 2008 respectively.

“What is most alarming is that there were only seven dairy farms sold in the month of January itself, which is normally a prime time for selling dairy farms,” says Mr McDonald.

There was a total of 33 dairy farms sold in the three months to January 2010, which was trending down on the 40 sold in the corresponding three months to January 2009 and well down on the 156 sold in the three months to January 2009.

“There is confidence amongst buyers in the rural sector and a lot of interest in farms but there appears to be a distinct lack of confidence from lenders,” he says.

The greatest number of farm sales during the three months to December was recorded in Waikato with 26 sales, followed by Manawatu/Wanganui with 24 sales recorded.

The value of farm prices remained steady at a national median of $1 million for the three months to January 2010 when compared to the three months to December 2009. However, it was well down on the $1,525,000 million and $1,790,000 recorded in the three months to January 2009 and January 2008 respectively.

Grazing accounted for the largest number of farms by type, with 91 sales recorded throughout the country in the three months to January 2010.

Lifestyle property sales continue to perform strongly, with turnover and prices holding reasonably steady. The national median selling price for a lifestyle property in the three months to January 2010 was $455,000, down $9,000 on the median price for the three months to December 2009 of $464,000. This compares with $450,500 and $460,000 in the three months to January 2009 and 2008 respectively.

Prices were highest in Auckland at $737,000, with the most modest median for lifestyle properties to be found on the West Coast ($185,000). Five districts experienced an increase in the median selling price for a lifestyle property, while six districts recorded decreases and three remaining steady.

A total of 1,213 lifestyle properties were sold in the three months to January 2010 compared with 1,359 in the three months to December 2009; well up on the 876 sold in the three months to January 2009 but down on the 1,701 sold in the three months to January 2008.

ENDS

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