Farm Transactions Slow As Seasonal Workloads Take Priority

News Release 14 August 2012

Farm Transactions Slow As Seasonal Workloads Take Priority

Data released today by the Real Estate Institute of NZ (“REINZ”) shows there were 55 more farm sales (+18.3%) for the three months ended July 2012 than for the three months ended July 2011. Overall, there were 356 farm sales in the three months to end of July 2012, compared with 406 farm sales in the three months to June 2012, a decrease of 50 sales (-12.3%). On a seasonally adjusted basis, after accounting for normal seasonal fluctuations, the number of sales rose by 0.7%, compared to the three months to June.

1,439 farms were sold in the year to July 2012, 50.4% more than were sold in the year to July 2011. The number of farms sold on an annual basis is now the highest since April 2009.

The median price per hectare for all farms sold in the three months to July 2012 was $17,955; a 22.6% increase on the $14,649 recorded for three months ended July 2011, and an increase of 2.2% on the $17,565 recorded for the three months to June 2012.

The REINZ Farm Price Index eased by 3.1% in the three months to July compared to the three months to June, from 2,915.9 to 2824.1. Compared to July 2011 the REINZ Farm Price Index has eased by 4.4%. Further details on the REINZ Farm Price Index are contained below.

10 of the 14 regions recorded increases in sales volumes for the three months ended July 2012 compared to the three months ended July 2011. Auckland recorded the largest increase in sales (+14 sales), followed by Canterbury (+12 sales) and Nelson and Bay of Plenty with nine sales each. Waikato and Gisborne each recorded five fewer sales and Southland three fewer sales in the three months to July 2012 compared to the three months to July 2011. Compared to the three months ended June 2012 only Auckland and recorded an increase in sales.

“ Grazing and finishing properties continues to attract the attention of buyers across the country, with sales of horticultural blocks showing an increase in Hawkes Bay and Marlborough,” says REINZ Rural Market Spokesman Brian Peacocke. “Given the seasonal workloads on farms at this time of year the number of sales has eased back, however, compared to this time last year the number of sales is more than 18% higher. The fall in the REINZ Farm Price Index this month is not unexpected given the continuing uncertainties in Europe and recent falls in schedule prices.”

“There is increasing enquiry, both from local buyers and offshore buyers, for dairy properties which may lead to good support for this sector once spring gets underway. There is also steady enquiry for quality sheep and beef properties.”

Grazing properties accounted for the largest number of sales with 53.4% share of all sales over the three months. Finishing properties accounted for 19.9%, Dairy and Horticulture properties 8.1% each. These four property types accounted for 89.5% of all sales during the three months ended July 2012.

For the three months ended July the median sales price per hectare for dairy farms was $22,679 (29 properties), compared to $27,919 for the three months ended June 2012 (47 properties), and $32,854 (41 properties) for the three months ended July 2011. The median dairy farm size for the three months ended July 2012 was 119 hectares.

Included in sales for the month of July were two dairy farms at a median sale value of $11,424 per hectare. The median farm size was 344.5 hectares with a range of 256 hectares in Gisborne to 433 hectares on the West Coast. The median production per hectare across all dairy farms sold in July 2012 was 539 kgs of milk solids.

For the three months ended July 2012 the median sales price per hectare for finishing farms was $23,028 (71 properties), compared to $18,851 for the three months ended June 2012 (82 properties), and $12,050 (48 properties) for the three months ended July 2011. The median finishing farm size for the three months ended July 2012 was 42 hectares.

For the three months ended July 2012 the median sales price per hectare for grazing farms was $13,023 (190 properties) compared to $13,025 for the three months ended June 2012 (205 properties), and $10,935 (156 properties) for the three months ended July 2011. The median grazing farm size for the three months ended July 2012 was 75 hectares.

For the three months ended July 2012 the median sales price per hectare for horticulture farms was $130,000 (29 properties) compared to $130,208 (31 properties) for the three months ended June 2012, and $114,794 (18 properties) for the three months ended July 2011. The median horticulture farm size for the three months ended July 2012 was 6 hectares.

Lifestyle Properties

The lifestyle property market saw a 10.8% increase in sales volume in the three months to July 2012 compared to July 2011. 1,514 sales were recorded in the three months to July 2012 compared to 1,367 sales in the three months to July 2011. 22 more sales were recorded compared to the three months to June 2012 (+1.5%); on a seasonally adjusted basis lifestyle sales rose by 0.7%.

Seven regions recorded increases in sales compared to June while seven recorded decreases. Auckland recorded the largest increase (+19 sales), followed by Waikato (+17 sales) and Manawatu/Wanganui (+10 sales). Nelson recorded the largest fall in sales (-8 sales), followed by Wellington (-7 sales) and Southland (-5 sales).

The national median price for lifestyle blocks eased by $2,500 (-0.5%) from last month’s record high of $477,500 to $475,000 for the three months to July. Compared to three months to July 2011 the median price also rose by $22,000 (+4.9%).

The number of days to sell for lifestyle properties remained steady at 84 days for the three months ended July compared to the three months ended June. Compared to the three months ended July 2011 the number of days to sell improved by nine days from 93 days to 84 days. Canterbury and Gisborne both recorded the shortest number of days to sell in July at 56 days, while the West Coast recorded the longest number of days to sell at 199 days.

Commenting on the lifestyle property market statistics Brian Peacocke said, “The number of lifestyle properties sold compared to 12 months ago shows a healthy increase, although the rate of increase has slowed during the winter months. Current low interest rates are providing some encouragement to buyers and the overall strength of the lifestyle market will be tested when spring gets underway.”

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