Autumn Surge Strengthens Sales In The Rural Property Sector

Autumn Surge Strengthens Sales In The Rural Property Sector

18 Apr 2012

Data released today by the Real Estate Institute of NZ (“REINZ”) shows there were 207 more farm sales (+108.9%) for the three months ended March 2012 than for the three months ended March 2011. Overall, there were 397 farm sales in the three months to end of March 2012, compared with 190 farm sales in the three months to March 2011. This is the highest number of farm sales in a three month period since September 2008; the start of the global financial crisis.

The number of sales rose by 46 (+13.1%) in the three months to March 2012 compared to the three months ended February 2012. 1,400 farms were sold in the year to March 2012, 61% more than were sold in the year to March 2011.

The median price per hectare for all farms sold in the three months to March 2012 was $20,056; a 7.3% decrease on the $21,641 recorded for three months ended February 2012 and up $2,479 per hectare (+14.1%) on the $17,577 recorded for the three months to March 2011.

All regions, apart from Hawkes Bay, recorded increases in sales volumes for the three months ended March 2012 compared to the three months ended March 2011. Canterbury recorded the largest increase in sales (+39 sales), followed by Waikato (+38 sales) and Manawatu/Wanganui (+29 sales). Hawkes Bay recorded four fewer sales in the three months to March 2012 compared to the three months to March 2011. Compared to the three months ended February 2012 11 regions recorded increases in sales and three recorded decreases in sales.

“Sales over the three months to March reflect the strengthening of the rural economy, bolstered by favourable growing conditions, very good levels of production, solid market returns and a positive climate for borrowing,” says REINZ Rural Market Spokesman Brian Peacocke. “However, sale prices have remained relatively steady with buyers and sellers in many cases moving slowly from previous positions to allow transactions to occur.”

“Irrespective of the above, a note of caution is clearly emerging as the industry prepares for winter, with the expectation that income levels may moderate next season, and given seasonal variabilities, it is unlikely the combination of current benevolent factors will be repeated for some time to come.”

Included in sales for the month of February were 27 dairy farms at an average sale value of $23,220 per hectare. The average farm size was 184.3 hectares with a range of 37 hectares in Southland to 644 hectares in Taranaki. The average production per hectare across all dairy farms sold in March 2012 was 674 kgs of milk solids.

Grazing properties accounted for the largest number of sales with 53.9% share of all sales over the three months. Finishing properties accounted for 16.6%, Dairy properties 15.4%, and Special properties 5.0%. These four property types accounted for 90.9% of all sales during the three months ended March 2012.

For the three months ended March the median sales price per hectare for dairy farms was $32,294 (61 properties), compared to $34,223 for the three months ended February 2012 (61 properties), and $32,533 (35 properties) for the three months ended March 2011. The median dairy farm size for the three months ended March 2012 was 105 hectares.

For the three months ended March 2012 the median sales price per hectare for finishing farms was $19,676 (66 properties), compared to $22,203 for the three months ended February 2012 (66 properties), and $10,497 (28 properties) for the three months ended March 2011. The median finishing farm size for the three months ended February 2012 was 94 hectares.

For the three months ended March 2012 the median sales price per hectare for grazing farms was $15,696 (214 properties) compared to $14,880 for the three months ended February 2012 (180 properties), and $13,220 (86 properties) for the three months ended March 2011. The median grazing farm size for the three months ended March 2012 was 72 hectares.

For the three months ended March 2012 the median sales price per hectare for horticulture farms was $165,929 (14 properties) compared to $202,500 (14 properties) for the three months ended February 2012, and $128,077 (20 properties) for the three months ended March 2011. The median horticulture farm size for the three months ended March 2012 was 4 hectares.

The lifestyle property market also saw a 42.4% increase in sales in the three months to March 2012 compared to March 2011. 1,347 sales were recorded in the three months to March 2012 compared to 946 sales in the three months to March 2011. 104 more sales were recorded compared to the three months to February 2012 (+8.4%).

10 regions recorded increases in sales compared to February while four recorded falls. Bay of Plenty recorded the largest increase (+23 sales), followed by Auckland (+21 sales) and Northland (+15 sales). Hawkes Bay recorded the largest drop in sales (-7 sales), followed by Gisborne (-5 sales) and Waikato (-3 sales).

The national median price for lifestyle blocks eased by $15,000 (-3.2%) from $465,000 for the three months to February to $450,000 for the three months to March. Compared to three months to March 2011 the median price eased by $5,000 (-1.1%).

Commenting on the lifestyle property market statistics Brian Peacocke said, “Sales of lifestyle blocks remain strong from a national perspective, with a 20 % increase in volumes from the previous month. While significant increases in volumes have occurred, it is mainly in the Auckland, Bay of Plenty and Canterbury regions, the latter in particular being driven strongly by the ongoing impact of the February 2011 earthquake.”

“In contrast, other areas are experiencing patchy activity, with prices across the country in the main holding at steady levels, apart from the Canterbury region where the demand is clearly putting prices under pressure.”

ENDS

http://img.scoop.co.nz/media/pdfs/1204/REINZRuralMarketStatisticsMarch2012.pdf

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