Sales Volumes Remain Solid as Drought Conditions Ease

News Release 16 May 2013

Sales Volumes Remain Solid as Drought Conditions EaseSales Volumes Remain Solid as Drought Conditions Ease

SummarySummary

Data released today by the Real Estate Institute of NZ (“REINZ”) shows there were 67 more farm sales (+17.8%) for the three months ended April 2013 than for the three months ended March 2013. Overall, there were 443 farm sales in the three months to end of April 2013, the same number of sales as April 2012. 1,454 farms were sold in the year to April 2013, 5.1% more than were sold in the year to April 2012.

The median price per hectare for all farms sold in the three months to April 2013 was $20,241; an 8.7% increase on the $18,617 recorded for three months ended April 2012. The median price per hectare fell by 9.3% compared to March.

The REINZ All Farm Price Index increased by 1.4% in the three months to April compared to the three months to March, from 2,907.18 to 2,946.57. Compared to April 2012 the REINZ All Farm Price Index fell by 5.2%. The REINZ All Farm Price Index adjusts for differences in farm size, location and farming type compared to the median price per hectare, which does not adjust for these factors.

Six regions recorded increases in sales volume for the three months ended April 2013 compared to the three months ended April 2012. Auckland recorded the largest increase in sales (+23 sales), followed by Waikato (+11 sales) and Northland (+10 sales). Eight regions recorded decreases in sales volume with Southland recording the largest fall (-18 sales), followed by Canterbury (-17 sales) and Nelson (-9 sales). Compared to the three months ended March 2013 11 regions recorded an increase in sales, lead by Manawatu/Wanganui (+13 sales).

“In spite of the earlier dry conditions that resulted in some vendors being reluctant to commit to the marketplace, sales volumes have remained steady, prices have remained fully firm and the demand for rural property has been consistently strong across the country,” says REINZ Rural Market Spokesman Brian Peacocke.

“Highlights this month include, strong interest in dry stock and dairy properties in the Waikato and King Country, a re-emergence of interest in kiwifruit sector in the Bay of Plenty, steady activity in the horticulture sector in Gisborne, and increasing demand for dairy land in the lower North Island, underpinned by bank support.”

“In the South Island, there has been very strong demand for dairy, dairy support, finishing and arable land across Canterbury, strong demand for drystock properties in Otago and a busy market in Southland for all property types.”

Grazing properties accounted for the largest number of sales with 46.3% share of all sales over the three months to April. Dairy properties accounted for 19.6%, Finishing properties accounted for 18.7% and Horticulture properties accounted for 7.0% of all sales. These four property types accounted for 91.6% of all sales during the three months ended April 2013.

Dairy FarmsDairy Farms
For the three months ended April 2013 the median sales price per hectare for dairy farms was $34,819 (87 properties), compared to $35,487, for the three months ended March (83 properties), and $33,132 (68 properties) for the three months ended April 2012. The median dairy farm size for the three months ended March 2013 was 129 hectares.

Included in sales for the month of April were 29 dairy farms at a median sale value of $27,616 per hectare. The median farm size was 129 hectares with a range of 47 hectares in the Waikato to 409 hectares in Canterbury. The median production per hectare across all dairy farms sold in April 2013 was 928kgs of milk solids.

The REINZ Dairy Farm Price Index rose by 0.9% in the three months to April compared to the three months to March, from 1,744.80 to 1,761.16. Compared to April 2012 the REINZ Dairy Farm Price Index fell by 6.1%. The REINZ Dairy Farm Price Index adjusts for differences in farm size and location compared to the median price per hectare, which does not adjust for these factors.

Finishing FarmsFinishing Farms
For the three months ended April 2013 the median sales price per hectare for finishing farms was $20,293 (83 properties), compared to $20,293 for the three months ended March (75 properties), and $14,551 (70 properties) for the three months ended April 2012. The median finishing farm size for the three months ended April 2013 was 69 hectares.

Grazing Farms Grazing Farms
For the three months ended April 2013 the median sales price per hectare for grazing farms was $12,900 (205 properties) compared to $12,702 for the three months ended March (163 properties), and $15,036 (233 properties) for the three months ended April 2012. The median grazing farm size for the three months ended April 2013 was 65 hectares.

Horticulture FarmsHorticulture Farms
For the three months ended April 2013 the median sales price per hectare for horticulture farms was $118,119 (31 properties) compared to $119,067 (30 properties) for the three months ended March, and $126,110 (22 properties) for the three months ended April 2012. The median horticulture farm size for the three months ended April 2013 was six hectares.

Lifestyle PropertiesLifestyle Properties
The lifestyle property market saw a 16.2% (+237 sales) increase in sales volume in the three months to April 2013 compared to April 2012. 1,696 sales were recorded in the three months to April 2013 compared to 1,459 sales in the three months to April 2012. 202 more sales were recorded compared to the three months to March 2013 (+13.5%). For the 12 months to March 2013 there were 6,092 unconditional sales of lifestyle properties, an increase of 16.1% over the 12 months to April 2012.

Seven regions recorded increases in sales compared to April 2012 while five recorded decreases in sales. Auckland recorded the largest increase (+156 sales), followed by Waikato (+58 sales) and Canterbury (+53 sales). Compared to March 2013, 12 regions recorded increases in sales with one region recording a decrease. Auckland recorded the largest increase in sales (+53 sales), followed by Canterbury (+39 sales) and Waikato (+28 sales).

The national median price for lifestyle blocks rose by $58,500 (+12.7%) from $460,000 for the three months to April 2012 to $518,500 for the three months to April 2013 to reach a new record high. Of note, the median price for lifestyle blocks in Auckland, Canterbury and Waikato, the three regions with the most lifestyle sales, representing 54% of all lifestyle sales, remain below their respective record medians.

The number of days to sell for lifestyle properties eased by one day, from 71 days for the three months to the end of March to 72 days for the three months to the end of April. Compared to the three months ended April 2012 the number of days to sell improved by 10 days from 82 days to 72 days. Southland recorded the shortest number of days to sell in April at 42 days, followed by Gisborne at 44 days and Canterbury at 53 days. Bay of Plenty recorded the longest number of days to sell at 109 days, followed by West Coast at 101 days and Northland at 95 days.

Commenting on the lifestyle property market Brian Peacocke said, “Activity in the lifestyle sector remains solid across the country, with Auckland, Waikato and Canterbury being the most active regions.”

“The lifestyle market in Auckland is benefitting from the strong urban residential market, with some spill over effects from Auckland into the Waikato market where local demand is being boosted by expats return and demand from Auckland. There is an emerging shortage of properties in the $900,000 - $1 million ranges in the Waikato. In Canterbury demand is strongest in the $600,000 - $700,000 range with slower activity at higher price points. .”

REINZ Dairy Farm Price Index – Additional DataREINZ Dairy Farm Price Index – Additional DataBrian Peacocke Tel: 07 870 2112 or mobile 021 373 113 Real Estate Institute of New Zealand www.realestate.co.nz Editors Note: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 July refer to the period from 1 December 2012 to 28 February 2013.The REINZ Farm Price Indices have been developed in conjunction with the Reserve Bank of New Zealand. It adjusts sale prices for property specific factors such as location, size and farm type which can affect the median $/hectare calculations and provides a more accurate measure of farm price movements. The REINZ Farm Price Indices has been calculated with a base of 1,000 for the three months ended March 1996. The REINZ Farm Price Indices is best utilised in assessing percentage changes over various time periods rather than trying to apply changes in the REINZ Farm Price Index to specific property transactions.

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