Rural Sales Volumes Rising Steadily

News Release 15 September 2011

Rural Sales Volumes Rising Steadily on Annualised Basis

Data released today by the Real Estate Institute of NZ (“REINZ”) shows there were 73 more sales (+38.0%) for the three months ended August 2011 than for the three months ended August 2010. Overall, there were 265 farm sales in the three months to end of August 2011 compared with 192 sales in the three months to August 2011. The number of sales fell by 36 (-12.0%) in the three months to August 2011 compared to the three months ended July 2011.

The median price per hectare for all farms sold in the three months to August 2011 was $15,148 compared to $14,649 in the three months to July 2011 and $16,968 for the three months to August 2010.

The number of sales for the 12 months to August 2011 was 1,003, the first time since October 2009 that the annual number of sales has exceeded 1,000, indicating that while the August figures are lower than for July, the underlying trend is rising. Four regions (Bay of Plenty, Hawkes Bay, Wellington and Nelson) recorded increases in sales volume for the three months ended August, with only Waikato and Canterbury recording significant falls in the number of sales.

“Sales figures for August continue to reflect the peak seasonal workload for farmers at this time of year,” says REINZ Rural Market Spokesman Brian Peacocke. “Farmer returns remain solid with an expectation for commodity prices to hold or in some cases firm slightly as the season progresses. We are also seeing enquiry emerging for quality properties with an expectation of lower availability in the early stages of spring, until a clearer indication of pricing has emerged.”

“Dairy farm sales, as expected for this time of year are at a low level, however, there is ongoing demand for good quality grazing, fattening and dairy support units with sales spread evenly across the country. What is encouraging is the solid increases in the number of sales across most farm types compared to this time last year, with all but one region recording an increase in sales compared to August 2010,” said Mr Peacocke.

Included in sales for the month of August were eight dairy farms at an average sale value of $26,755 per hectare and $31 per kg of milk solids (MS). The average farm size was 238 hectares with a range of 54 hectares on the West Coast to 444 hectares in Southland. The average production per hectare across all dairy farms sold in August 2011 was 861 kgs of milk solids.

Grazing properties accounted for the largest number of sales with 52.8% share of all sales over the three months. Dairy properties accounted for 10.6%, Finishing properties 16.6% and Horticulture and Arable properties 5.7% each. These five property types accounted for 91.3% of all sales during the three months ended August 2011.

For the three months ended August 2011 the median sales price per hectare for dairy farms eased back $1,800 per hectare to $31,050 (28 properties) compared to the three months ended July 2011 at $32,854 (41 properties), and $36,667 (17 properties) for the three months ended August 2010. The median dairy farm size for the three months ended August 2011 was 189 hectares.

For the three months ended August 2011 the median sales price per hectare for finishing farms was $14,557 (44 properties) compared to $12,050 for the three months ended July 2011 (48 properties), and $10,257 (26 properties) for the three months ended August 2010. The median finishing farm size for the three months ended July 2011 was 119 hectares.

For the three months ended August 2011 the median sales price per hectare for grazing farms was $10,294 (140 properties) compared to $10,935 for the three months ended July 2011 (156 properties), and $13,851 (98 properties) for the three months ended August 2010. The median grazing farm size for the three months ended August 2011 was 98 hectares.

For the three months ended August 2011 the median sales price per hectare for horticulture farms was $82,000 (15 properties) compared to $114,794 for the three months ended July 2011 (18 properties), and $176,829 (31 properties) for the three months ended August 2010. The median horticulture farm size for the three months ended August 2011 was 10 hectares.

The lifestyle property market also saw an easing in the number of sales in the three months to August 2011 compared to the three months to July 2011. 1,304 sales were recorded in the three months to August, down 63 (-4.6%) on the three months to July 2011, but up 238 (+22.3%) compared to the three months to August 2010. Gisborne, Wellington and Canterbury all recorded increases in sales volume in August.

The national median price eased $9,000 from $453,000 for the three months to July to $444,000 for the three months to August. Compared to three months to August 2010 the median price increased by $7,250.

Commenting on the lifestyle property market statistics Brian Peacocke said, “Sales for August in the lifestyle market, while down from the peak in May this year are still well above the number of sales for the same period last year. The continued easing in the median price is consistent with the trends in the rural and residential property markets, where sales volume increases are occurring but prices are either trending sideways or easing.”

----- ENDS -----

© Scoop Media