Small grazing blocks drive rural sale volumes

17 May 2013

Small grazing blocks drive rural sale volumes

While Real Estate Institute of NZ (REINZ) data shows 67 more farm sales took place in the three-months to April 2013, this has been driven by the sale of smaller grazing blocks and comes with the median price per hectare falling 9.3 percent.

“While more farms were sold, 42 of them were grazing blocks with a median size of 65 hectares,” says Bruce Wills, Federated Farmers President.

“Perhaps more significant is that the median price per hectare across all farm types actually fell. At $20,241 per hectare, this is 9.3 percent down on the previous median of $22,317.

“While more farms overall were sold, the price per hectare fell.

“It is also hard to judge the effect of drought on sales figures because its autumnal nature is highly unusual.

“While drought was biting from late spring on Northland’s West Coast, the East Coast and inland parts of the North Island, other farming areas were okay until mid-summer.

“Northland’s drought declaration came on 27 February with the other drought declarations following over March and April.

“Given Budget 2013 yesterday, we know housing is becoming a big issue. Federated Farmers will be watching both the number of farms being sold around the major centres, as well as the number of lifestyle blocks being sold.

“We said it yesterday but we need to stress it again; building our cities up rather than out is Federated Farmers preference.

“Doing this not only improves the economies of scale for the provision of urban services, it ensures greenfield development is the option of last resort,” Mr Wills concluded.

ENDS

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