Number of Farm Sales little changed compared to Feb 2010

16 March 2011

The were 204 farm sales in the three months ended February 2011 compared to 219 in the three months ended January 2011 and 205 in the three months to February 2010 continuing the trend of low farm sales over the past three years.

“There is certainly buyer interest in farm properties across the country with plenty of evidence of rising farm returns, however, buyers are also being cautious and securing finance to complete transactions has remained a constraint for most of the past three months,” says REINZ Rural Market Spokesman Peter McDonald. “Anecdotal evidence suggests banks may be starting to have greater confidence in the rural sector.”

Included in sales for the month of February were 13 dairy farms at an average sale value of $35,000 per hectare and $38 per kg of milk solids (MS). There was considerable variability in these numbers with the values ranging from $26 per kg of MS in Oamaru to $52 per kg of MS in Taranaki. The average farm size was 138 hectares with a range of 52 hectares in Taranaki to 536 hectares in Hawkes Bay. The average production per hectare across all farms sold in February was 942 kgs. Also of interest was the sale of a 1,000 hectare fattening property in the Hawkes Bay sold during February 2011 for in excess of $9 million; the first such sale of this size for some time.

Grazing properties accounted for the largest number of sales with 41.2% share of all sales over the three months. Dairy properties accounted for 24.5%, Horticulture properties 10.6% and Finishing properties 8.8%. These four property types accounted for 85.1% of all sales during the three months ended February 2011.

“The utility of the median price has become more challenging with the much lower volume of sales being completed. By way of comparison the number of sales in the three months to February 2008 was 713, whereas the number of sales in the three months to February 2011 was less than 30% of this total,” says Peter McDonald. “Because of these low volumes the median figures should be treated with some caution.”

The median prices across the four major farm types were little changed between January 2011 and February 2011. The dairy farm median was unchanged at $3,574,450, the Finishing median rose $50,000 to $1,200,000, the Grazing median was unchanged at $1,000,000 and the Horticulture median rose $10,000 to $785,000. Compared to February 2010, the Dairy median rose $524,000, the Finishing median rose $247,000, the Grazing median rose $100,000 and the Horticulture median fell $165,000

The lifestyle property market also saw a contraction in median prices and volumes in the three months to February 2011. The national median price was $435,500 for the three months to February 2011, down $4,500 compared to the three months to January 2011, and down $2,500 compared to the three months ended February 2010. Total sales completed for the three months to February 2011 were 930, down 55 (5.6%) compared to the three months ended January 2011, and down 175 (15.8%) compared to the three months ended February 2010.

Commenting on the lifestyle property market statistics Peter McDonald said, “The ongoing stability in the median prices for lifestyle properties continues a trend apparent over the past few years. While other types of property have seen noticeable changes in median prices the lifestyle market has remained relatively stable”.

“Looking forward the improvement in farm returns will be encouraging buyers and motivating vendors to complete transactions. Given that farm sales have been at historical lows for three years there is likely to be pent up pressure on both sides. There is also interest emerging in dairy support blocks, which have been very quiet for the past three years”, said Peter McDonald.

Regional Commentaries – February 2011

Northland

The information provided by the Real Estate Institute in relation to the rural and lifestyle real estate market covers a three month period. Therefore references to February results refer to the period from 1 December 2010 – 28 February 2011 and references to January refer to the period from 1 November 2010 - 31 January 2011.

The median farm price in Northland decreased to $520,000 in February (January 2011: $640,000; February 2010: $520,000). 13 farms sold (January 2011: 20; February 2010: 15). The 13 farms sold consisted of eight grazing, two forestry, one each of arable, dairy, horticulture.
The median price for a lifestyle block increased to $292,500 in February, from $260,000 in January (February 2010: $320,000). 84 lifestyle blocks sold during the period (January 2011: 81; February 2010: 108).

Auckland
The information provided by the Real Estate Institute in relation to the rural and lifestyle real estate market covers a three month period. Therefore references to February results refer to the period from 1 December 2010 – 28 February 2011 and references to January refer to the period from 1 November 2010 - 31 January 2011.

The median farm price in Auckland rose slightly to $856,250 in February (January 2011: $827,500; February 2010: $900,000). Six farms sold (three horticulture, two arable, one forestry). (January 2011: 10; February 2010: 15).

The number of lifestyle blocks sold decreased to 144 in February (January 2011: 158; February 2010: 182). The median price also decreased to $701,500 in February (January 2011: $741,000; February 2010: $700,000).

Waikato
The information provided by the Real Estate Institute in relation to the rural and lifestyle real estate market covers a three month period. Therefore references to February results refer to the period from 1 December 2010 – 28 February 2011 and references to January refer to the period from 1 November 2010 - 31 January 2011.

22 farms (ten grazing, eight dairy, three finishing and one arable) sold in February, down on the 25 sold in January (February 2010: 29). The median price crept up to $1,550,000 in February (January 2011: $1,500,000; February 2010: $1,406,250).

107 lifestyle blocks sold in February, down from the 128 sold in January. The median price fell slightly to $395,000 (January 2011: $400,000). In February 2010, 119 lifestyle blocks sold with a median price of $417,500.

Bay of Plenty
The information provided by the Real Estate Institute in relation to the rural and lifestyle real estate market covers a three month period. Therefore references to February results refer to the period from 1 December 2010 – 28 February 2011 and references to January refer to the period from 1 November 2010 - 31 January 2011.

The median price for a farm was up at $875,000 in February (January 2011: $867,500; February 2010: $1,162,500). 17 farms (eight horticulture, three each of grazing and forestry, two dairy and one special) sold in February, easing down slightly from the 20 sold in January (February 2010: 24).

64 lifestyle blocks sold in February (January 2011: 81; February 2010: 67). The median price increased to $503,000 (January 2011: $485,000; February 2010: $550,000).

Gisborne
The information provided by the Real Estate Institute in relation to the rural and lifestyle real estate market covers a three month period. Therefore references to February results refer to the period from 1 December 2010 – 28 February 2011 and references to January refer to the period from 1 November 2010 - 31 January 2011.

The median farm price remained at $585,000 in February (February 2010: $450,148). One farm sold, consisting of one horticulture. (January 2011: three; February 2010: two)

Lifestyle block sales volume was down slightly with 11 sold (January 2011: 14; February 2010: 14). The median price dropped to $450,000 from January’s $477,500 (February 2010: $265,000).

Hawkes Bay
The information provided by the Real Estate Institute in relation to the rural and lifestyle real estate market covers a three month period. Therefore references to February results refer to the period from 1 December 2010 – 28 February 2011 and references to January refer to the period from 1 November 2010 - 31 January 2011.

The median farm price increased to $1,080,000 in February, up from $1,060,000 in January (February 2010: $1,292,500). 12 farms sold (January 2011: 13; February 2010: 12) consisting of six grazing, two each of forestry and horticulture and one each of dairy and finishing

39 lifestyle blocks sold in February, remaining steady with the 38 sold in January. The median price decreased to $382,500 (January 2011: $420,500). In February 2010, 41 lifestyle blocks sold with a median sale price of $483,000.

Taranaki
The information provided by the Real Estate Institute in relation to the rural and lifestyle real estate market covers a three month period. Therefore references to February results refer to the period from 1 December 2010 – 28 February 2011 and references to January refer to the period from 1 November 2010 - 31 January 2011.

The median farm price in Taranaki was up at $2,659,375 in February, from $2,400,000 in January (February 2010: $1,915,000). 26 farms (19 dairy and seven grazing) sold in February (January 2011: 19; February 2010: 14).

28 lifestyle blocks sold in February (January 2011: 30; February 2010: 36). The median price eased down to $353,000 in February (January 2011: $364,000; February 2010: $430,000).

Manawatu/Wanganui
The information provided by the Real Estate Institute in relation to the rural and lifestyle real estate market covers a three month period. Therefore references to February results refer to the period from 1 December 2010 – 28 February 2011 and references to January refer to the period from 1 November 2010 - 31 January 2011.

18 farms (eight grazing, three each of dairy and finishing and two each of arable and special) sold in February, same as in January (February 2010: 24). The median price crept up to $940,000 from January’s $890,000 (February 2010: $947,500).

The median price for a lifestyle block remained steady at $290,000 in February (February 2010: $280,000). In total 77 lifestyle blocks sold, also remaining steady with 78 sold in January (February 2010: 95).

Wellington
The information provided by the Real Estate Institute in relation to the rural and lifestyle real estate market covers a three month period. Therefore references to February results refer to the period from 1 December 2010 – 28 February 2011 and references to January refer to the period from 1 November 2010 - 31 January 2011.

The median farm price in Wellington rose to $842,000 in February, from $525,000 in January (February 2010: $520,500). Three farms sold in February, remaining the same as in January (February 2010: eight) consisting one each of finishing, forestry and grazing.

66 lifestyle blocks sold in February (January 2011: 61; February 2010: 66). The median price increased to $520,000 in February from $481,000 in January (February 2010: $420,000).

Nelson/Marlborough
The information provided by the Real Estate Institute in relation to the rural and lifestyle real estate market covers a three month period. Therefore references to February results refer to the period from 1 December 2010 – 28 February 2011 and references to January refer to the period from 1 November 2010 - 31 January 2011.

The median farm price remained the same at $1,850,000 in February (February 2010: $850,000). The number of farm sales eased to seven (three each of grazing and horticulture and one of forestry). (January 2011: seven; February 2010: five).

57 lifestyle blocks sold in February, down slightly on the 51 sold in January 2011 (February 2010: 68). The median price decreased to $465,000 (January 2011: $519,300; February 2010: $465,000).

West Coast
The information provided by the Real Estate Institute in relation to the rural and lifestyle real estate market covers a three month period. Therefore references to February results refer to the period from 1 December 2010 – 28 February 2011 and references to January refer to the period from 1 November 2010 - 31 January 2011.

The median farm price dropped markedly to $528,000 in February (January 2011 $2,725,000; February 2010: $360,000). The number of farm sales dropped to two consisting of two grazing. (January 2011: six; February 2010: three).

The median price for a lifestyle block dropped to $142,500 (January 2011 $210,000; February 2010: $150,000). 14 lifestyle blocks sold in February (January 2011: 15; February 2010: 15).

Canterbury
The information provided by the Real Estate Institute in relation to the rural and lifestyle real estate market covers a three month period. Therefore references to February results refer to the period from 1 December 2010 – 28 February 2011 and references to January refer to the period from 1 November 2010 - 31 January 2011.

31 farms (21 grazing, four dairy and two each of arable, finishing and forestry) sold in February, down on the 37 sold in January (February 2010: 28). The median price remained steady at $1,815,500 (February 2010: $1,367,500).

147 lifestyle blocks sold, remaining steady with the 146 sold in January. The median price eased to $515,000 from $506,000 in January. In February 2010, 192 lifestyle blocks sold with a median price of $420,000.

Otago
The information provided by the Real Estate Institute in relation to the rural and lifestyle real estate market covers a three month period. Therefore references to February results refer to the period from 1 December 2010 – 28 February 2011 and references to January refer to the period from 1 November 2010 - 31 January 2011.

The median farm price decreased to $1,250,000 in February, from $1,449,500 in January (February 2010: $1,050,000). 21 farms sold (January 2011: 16; February 2010: 13). The farms sold consisted of five grazing, four dairy, three each of finishing, forestry and special, two horticulture and one arable.

47 lifestyle blocks sold in February (January 2011: 59; February 2010: 72). The median price increased to $405,000 in February from $370,000 in January (February 2010: $385,000).

Southland
The information provided by the Real Estate Institute in relation to the rural and lifestyle real estate market covers a three month period. Therefore references to February results refer to the period from 1 December 2010 – 28 February 2011 and references to January refer to the period from 1 November 2010 - 31 January 2011.

Farm sales decreased with 25 farms (ten grazing, eight dairy, five finishing and one each of forestry and horticulture) sold in February (January 2011: 22; February 2010: 13). The median price increased to $3,300,000 in February (January 2011: $2,683,068; February 2010: $900,000).

45 lifestyle blocks sold in February, the same as that sold in January. The median price was up at $335,000 (January 2010: $324,000). In February 2010, 30 lifestyle blocks sold with a median price of $330,750.

ENDS

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