Rural Volumes Lifting As Spring Sales Season Gets Underway

Rural Sales Volumes Lifting As Spring Sales Season Gets Underway

Data released today by the Real Estate Institute of NZ (“REINZ”) shows there were 139 more sales (+94.6%) for the three months ended October 2011 than for the three months ended October 2010. Overall, there were 286 farm sales in the three months to end of October 2011 compared with 147 sales in the three months to October 2010. The number of sales increased by 29 (+11.3%) in the three months to October 2011 compared to the three months ended September 2011.

The median price per hectare for all farms sold in the three months to October 2011 was $18,878 (+6.7%) compared to $17,694 in the three months to September 2011 and $18,124 for the three months to October 2010.

Nine regions recorded increases in sales volume for the three months ended October 2011, with Canterbury recording the largest increase (+9 sales), followed by Auckland (+8 sales) and Nelson (+7 sales). Three regions recorded lower sales with Manawatu/Wanganui recording the largest fall (-3 sales) followed by Gisborne and Southland (-1 sale each), when compared to the three months ended September 2011.

“The rise in the number of sales in the three months to October reflects the large number of properties currently being marketed for sale and a general mood of cautious optimism despite the current economic challenges internationally,” says REINZ Rural Market Spokesman Brian Peacocke. “The recent reduction in Fonterra’s forecast payout has had some impact on activity in the dairy sector, however, this is being offset to some extent by some of the best spring growing conditions we have seen for many years.”

Included in sales for the month of October were five dairy farms at an average sale value of $34,046 per hectare. The average farm size was 129 hectares with a range of 47 hectares in Bay of Plenty to 239 hectares in Canterbury. The average production per hectare across all dairy farms sold in October 2011 was 873 kgs of milk solids.

Grazing properties accounted for the largest number of sales with 58.7% share of all sales over the three months. Finishing properties accounted for 15.0, Horticulture properties 7.7% and Dairy properties 5.9%. These four property types accounted for 87.3% of all sales during the three months ended October 2011.

For the three months ended October 2011 the median sales price per hectare for dairy farms was $29,668 (17 properties), the same as for the three months ended September 2011 (19 properties), and $27,808 (8 properties) for the three months ended October 2010. The median dairy farm size for the three months ended October 2011 was 162 hectares. For the three months ended October 2011 the median sales price per hectare for finishing farms was $18,847 (43 properties) compared to $18,735 for the three months ended September 2011 (36 properties), and $9,908 (11 properties) for the three months ended October 2010. The median finishing farm size for the three months ended September 2011 was 93 hectares. For the three months ended October 2011 the median sales price per hectare for grazing farms was $16,013 (168 properties) compared to $12,330 for the three months ended September 2011 (144 properties), and $14,972 (88 properties) for the three months ended October 2010. The median grazing farm size for the three months ended October 2011 was 63 hectares.

For the three months ended October 2011 the median sales price per hectare for horticulture farms was $84,960 (22 properties) compared to $82,000 (19 properties) for the three months ended September 2011 (19 properties), and $175,000 (23 properties) for the three months ended October 2010. The median horticulture farm size for the three months ended October 2011 was 9 hectares.

The lifestyle property market also saw a further easing in the number of sales in the three months to October 2011 compared to the three months to September 2011. 1,197 sales were recorded in the three months to October, down 64 (-5.1%) on the three months to September 2011, but up 144 (+13.7%) compared to the three months to October 2010. Five regions recorded increases in sales compared to September while nine recorded falls. Auckland recorded the largest fall (-19 sales), followed by Bay of Plenty (-13 sales) and Taranaki (-11 sales). Waikato, Wellington and Southland all recorded the largest increase (+3 sales each).

The national median price for lifestyle blocks rose by $5,000 from $430,000 for the three months to September to $435,000 for the three months to September. Compared to three months to October 2010 the median price increased by $10,000.

Commenting on the lifestyle property market statistics Brian Peacocke said, “The lifestyle property market has been experiencing a easing in the number of sales recently, although the median price has remained relatively stable. Activity in the lifestyle market suggest that both vendors and buyers are focused on other issues at present.”

ENDS

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