Rural Sales Volumes Rise Further

News Release 15 July 2011

Rural Sales Volumes Rise Further, Prices Continue to Ease

Data released today by the Real Estate Institute of NZ (“REINZ”) shows there was a further improvement in the number of rural sales across New Zealand in the three months to June 2011. Overall, there were 393 farm sales in the three months to end of June2011 compared with 364 sales in the three months to May 2011 and 302 sales in the three months to June 2010.

The median price per hectare for all farms sold in the three months to June 2011 was $15,568 compared to $17,199 in the three months to May 2011 and $17,772 for the three months to June 2010. The median price per hectare is now at its lowest point since July 2004 and continues the downward trend in median prices evident since early 2009.

The Otago region recorded the strongest increase in sales between May and June, followed by Canterbury and Manawatu/Wanganui. Two regions recorded a fall in sales between May and June, although these falls were minor.

The number of farm sales for the year ended June 2011 was 960, 30 more than the number of farm sales for the year ended May 2011, and up from 931 sales recorded for the year ended June 2010.

“The increase in farm sales for the three months to June continues the turn around in volumes that began in April, although with the onset of winter the rate of increase has slowed,” says REINZ Rural Market Spokesman Brian Peacocke. “Most of the sales activity was in the grazing, dairy support and finishing sectors in the South Island with Southland again recording the largest number of sales.”

“We are seeing a noticeable increase in enquiry from purchasers targeting potential transactions in the spring, as well as an increase in the number of appraisals being done for sellers. The overall increase in activity from both buyers and sellers is being matched by a reinvigoration of interest in rural lending coming through from the banking sector,” said Mr Peacocke.

The easing of farm prices, as shown by the median price data has now brought farm prices more into line with the long term underlying trend, as shown by the median price for dairy farms below.

Included in sales for the month of June were 13 dairy farms at an average sale value of $24,081 per hectare and $35 per kg of milk solids (MS). The average farm size was 192 hectares with a range of 27 hectares in the Waikato to 541 hectares on the West Coast. The average production per hectare across all dairy farms sold in May 2011 was 693 kgs of milk solids.

Grazing properties accounted for the largest number of sales with 53.2% share of all sales over the three months. Dairy properties accounted for 14.8%, Finishing properties 15.0% and Horticulture properties 6.1%. These four property types accounted for 89.1% of all sales during the three months ended June 2011.

For the three months ended June 2011 the median sales price per hectare for dairy farms was steady at $30,828 (58 properties) compared to the three months ended May 2011 (60 properties), and $32,609 (31 properties) for the three months ended June 2010. The median dairy farm size for the three months ended June 2011 was 116 hectares.

For the three months ended June 2011 the median sales price per hectare for finishing farms was $10,377 (59 properties) compared to $10,860 for the three months ended May 2011 (55 properties), and $8,262 (38 properties) for the three months ended June 2010. The median finishing farm size for the three months ended June 2011 was 157 hectares.

For the three months ended June 2011 the median sales price per hectare for grazing farms was $12,892 (209 properties) compared to $13,490 for the three months ended May 2011 (186 properties), and $12,904 (146 properties) for the three months ended June 2010. The median grazing farm size for the three months ended June 2011 was 90 hectares.

For the three months ended June 2011 the median sales price per hectare for horticulture farms was $132,401 (24 properties) compared to $129,572 for the three months ended May 2011 (28 properties), and $148,221 (51 properties) for the three months ended May 2010. The median horticulture farm size for the three months ended June 2011 was 7 hectares.

The lifestyle property market also saw a further lift in volume in the three months to June 2011 although the median price remained at the same level compared to May. All regions apart from Northland and Gisborne saw an increase in sales, with Canterbury recording the strongest increase (up 28 sales). Nelson and Otago also recorded notable increases in sales volumes.

The national median price remained steady at $460,000 for the three months to June 2011, and rose $15,000 compared to the three month to June 2010. Total sales completed for the three months to June 2011 were 1,386, up 75 (5.8%) compared to the three months ended May 2011, and up 273 (24.5%) compared to the three months ended June 2010.

Commenting on the lifestyle property market statistics Brian Peacocke said, “The lifestyle property market is also demonstrating rising sales volumes with a 6% increase in June compared to May and an almost 25% increase compared to June last year, with almost all regions recording an increase in volumes. The median price for lifestyle properties was flat in June compared to May at $460,000, but was $15,000 higher than June last year.”

Editors Note:
The information provided by REINZ in relation to the rural real estate market covers the most recently completed three month period; thus references to June refer to the period from 1 April 2011 to 30 June 2011.

Regional Commentaries – June 2011

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 June results refer to the period from 1 April 2011 – 30 June 2011 and references to May refer to the period from 1 March 2011 – 31 May 2011.

Northland

The median selling price per hectare in Northland eased further to $11,765 in June 2011 (May 2011: $12,533; June 2010: $19,909). 25 farms sold (May 2011: 24; June 2010: 28). The 25 farms sold consisted of 15 grazing properties, four dairy, two horticulture, two forestry, one finishing and one special.
The median price for a lifestyle block eased slightly to $320,000, in June, from $322,500 in May (June 2010: $300,000). 111 lifestyle blocks sold during the period (May 2011: 118; June 2010: 95).

Auckland

The median selling price per hectare in Auckland fell to $36,875 in June from $47,046 in May (June 2010: $18,238). Because of the small number of sales that are occurring in the Auckland region these figures need to be treated with some caution. 19 farms sold (10 grazing, eight horticulture and one dairy (May 2011: 20; June 2010: 24).

The number of lifestyle blocks sold increased by just 3 to 267 in June (May 2011: 264; June 2010: 193). The median price eased by $13,750 to $720,000 in June (May 2011: $733,750;June 2010: $688,889).

Waikato

45 farms (28 grazing, 12 dairy, two arable, two finishing and one special) sold in June, up on the 41 sold in May and the 32 farms sold in June 2010. The median selling price per hectare remained steady at $37,658 in June (June 2010: $31,412).

151 lifestyle blocks sold in June, up five from the 146 sold in May and down one on the 152 sold in June 2010. The median price was steady at $415,00 in June (May 2011: $415,000, June 2010: $400,000).

Bay of Plenty

The median selling price per hectare rose to $49,200 in June (May 2011: $39,844; June 2010: $131,429). 15 farms (six horticulture, six grazing, two dairy and one finishing) sold in June, equal to the number sold in May (June 2010: 39).

94 lifestyle blocks sold in June (May 2011: 88; June 2010: 92). The median price rose $17,250 to $489,500 in June (May 2011: $472,250; June 2010: $482,500).

Gisborne

The median selling price per hectare rose slightly to $4,792 in June (May 2011: $4,767; June 2010: $5,180). 13 farms sold, consisting of four forestry, three grazing, two finishing, two horticulture, one arable and one special (May 2011: 12, June 2010: 8). Care needs to be taken with these figures due to the very low level of sales in this region.

9 Lifestyle blocks sold in June (May 2011: 10; June 2010: 10). The median price fell $16,500 to $387,000 from May’s $403,500 (June 2010: $267,500).

Hawkes Bay

The median selling price per hectare recovered to $8,400 in June from $7,490 in May (June 2010: $5,999). 17 farms sold (May 2011: 18; June 2010: 13) consisting of eight grazing, six finishing, two arable and one horticulture.

40 lifestyle blocks sold in June, up two on the 38 sold in May, and down 13 on the 53 sold in June 2010. The median price increased by $35,000 to $587,500 (May 2011: $552,500; June 2010 $400,000).

Taranaki

The median selling price per hectare in Taranaki was $28,947 in June, down from $34,722 in May (June 2010: $28,055). 20 farms (11 grazing, five dairy, two finishing and two forestry) sold in June (May 2011: 19; June 2010: 12).

55 lifestyle blocks sold in June (May 2011: 51; June 2010: 43). The median price eased $15,000 to $350,000 in June (May 2011: $365,000; June 2010: $385,000).

Manawatu/Wanganui

40 farms (25 grazing, seven finishing, six dairy, one arable and one forestry) sold in June, up six on the 34 sold in May (June 2010: 23). The median selling price per hectare fell to $13,442 from May’s $14,358 (June 2010: $7,264).

The median price for a lifestyle block increased by $33,000 to $327,000 in June from $294,000 in May (June 2010: $307,900). In total 105 lifestyle blocks sold, compared to 98 sold in May (June 2010: 88).

Wellington

The median selling price per hectare in Wellington was steady at $5,692 in June (May 2011: $5,692; June 2010: $6,228). Five farms sold in June, the same number that sold in May (June 2010: three) consisting of two arable, two grazing and one finishing.

76 lifestyle blocks sold in June (May 2011: 72; June 2010: 76). The median price fell by $7,000 to $397,500 in June from $404,500 in May (June 2010: $476,000).

Nelson/Marlborough

The median selling price per hectare rose was stable at $9,964 in June (June 2010: $12,878). The number of farm sales was also steady at 16 (seven forestry, six grazing, two dairy and one horticulture) (June 2010: 15).

81 lifestyle blocks sold in June, up 10 from the 71 sold in May 2011 (June 2010: 47). The median price jumped by $95,000 in June to $545,000 from $450,000 in May (June 2010: $500,000).

West Coast

The median selling price per hectare eased back to $16,183 in June from $17,660 in May (June 2010: $7,715). The number of farm sales rose to 13 consisting of six dairy, five grazing, one forestry and one finishing. (May 2011: 10; June 2010: six).

The median price for a lifestyle block leapt by almost $100,000 to $248,500 in June (May 2011 $150,000; June 2010: $383,500). 14 lifestyle blocks sold in June (May 2011: 11; June 2010: 8). Care needs to be exercised when interpreting these figures due to the low number of sales in this region.

Canterbury

57 farms (35 grazing, 10 finishing, five arable, three forestry, two dairy and two horticulture) sold in June, up on the 51 sold in May (June 2010: 45). The median selling price per hectare eased further to $15,434 in June from $17,876 in May (June 2010: $17,878).

228 lifestyle blocks sold, up on the 204 sold in May, and up strongly on the 159 sold in June 2010. The median price increased by $4,000 to $449,500 from $445,500 in May (June 2010: $475,000).



Otago

The median selling price per hectare fell to $6,778 in June, from $7,456 in May (June 2010: $9,450). 48 farms sold (May 2011: 40; June 2010: 27). The farms sold consisted of 25 grazing, 15 finishing, three arable, two dairy, two horticulture and one special.

88 lifestyle blocks sold in June (May 2011: 76; June 2010: 54). The median price eased by $16,750 to $460,750 in June from $477,500 in May (June 2010: $369,000).

Southland

60 farms sold in Southland in June, once again the most of any region in New Zealand, compared to 59 in May and 27 in June 2010. 30 grazing, 16 dairy, 11 finishing and three special farms sold in June. The median selling price per hectare eased to $21,619 in June compared to $22,149 in May (June 2010: $16,607).

67 lifestyle blocks sold in June, up from 64 sold in May and 43 sold in June 2010. The median price increased to $350,000 (May 2011: $335,000; June 2010: $355,000).

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