BNZ most ‘farmer friendly’ bank – First National

Media Release

Friday December 17, 2010

BNZ most ‘farmer friendly’ bank – First National

The BNZ is currently the most farmer friendly bank, according to First National’s latest quarterly rural property agent survey.

As confidence is slowly returning to the rural sector, First National’s sales volumes in spring show similar volumes to last year, but increased listings.

First National’s offices were also polled as to which banks were the most ‘farmer friendly' and currently doing most of the lending in their areas.

 BNZ topped the poll, followed closely by the National Bank, with Westpac in third place.

First National’s quarterly rural property survey across its offices showed sales this spring were on par with the same time last year while listings of farms up 20%.

However, the market fluctuated wildly from region to region with some areas such as Northland recording fewer sales than last spring, and other areas like the Bay of Plenty doing better.

First National Group general manager John Stewart said banks were proactive in lending again and while many buyers continued to hang back hoping prices would drop further, there were obviously enough serious buyers out there willing to meet serious vendors.

“Now that the heat has gone out of the market and prices are more closely aligned to returns, serious buyers and sellers are back to doing business.
 
“The current lift in listings is more a reflection of owners wishing to move on to other and often larger properties than perhaps might have been the case over the past couple of years where duress was regularly the prime driver.

"Those surveyed commented that the lift in buyer enquiry in recent times relfects the stabilising of costs and incomes, again allowing people to plan ahead.

“Increased enquiry is certainly being driven by recent moves by the banks to quietly move from their almost complete lack of support for individual rural purchasers to a more encouraging position.  This is resulting in New Zealand farmers being able to consider purchasing their next property, arresting for the moment at least, the 2009-early 2010 trend that saw many properties sold to rural partnerships and off shore buyers.

Notably though, grazing blocks, horticultural properties and lifestyle blocks made up the majority of sales.  Arable and finishing farms were very scarce both in sales and listings.

Hardest hit areas were Northland, the Waikato and Central Otago where listings and sales remained particularly low.

Successive spring droughts in both Northland and the Waikato have negatively affected values.  Agents report a significant number of farmers whose banks helped them through last spring were likely to go to the wall in coming months as anticipated production failed to materialize and was unlikely to cover the additional debt incurred.

In Central Otago, the ongoing strength of the New Zealand dollar and weakness of traditional offshore property investment has hit the rural market hard.  Many listings have been taken off the market but are still for sale if buyers present themselves to agents.  Unsold blocks of bare land are being developed by owners into the likes of cherry orchards to add value in the meantime.  

The best regional performers in sales were the Bay of Plenty followed by Taranaki.  

Although the Psa scare slowed interest in kiwifruit orchards, grazing blocks, horticulture and lifestyle properties kept the market turning over in the Bay of Plenty.

Taranaki had twice as many listings as the same time last year and sold a similar number of rural properties.

Stewart said the rural market in New Zealand was by no means buoyant but signs were there that the gulf between vendors’ and buyers’ respective expectations had narrowed.

“Buyers, while much more positive than for some years, are still scarce so any offer needs to be taken seriously by vendors unless they have the luxury of being able to wait.

ends

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