Early Winter Activity Reflects Increasing Confidence

Early Winter Activity Reflects Increasing Confidence

SummarySummarySummary

Data released today by the Real Estate Institute of NZ (“REINZ”) shows there were 68 more farm sales (+16.7%) for the three months ended June 2013 than for the three months ended June 2012. Overall, there were 474 farm sales in the three months to end of June 2013, compared to 512 farm sales for the three months ended May 2013 (-7.4%). 1,501 farms were sold in the year to June 2013, 6.2% more than were sold in the year to June 2012.

The median price per hectare for all farms sold in the three months to June 2013 was $19,716; a 12.3% increase on the $17,565 recorded for three months ended June 2012. The median price per hectare fell 3.8% compared to May.

The REINZ All Farm Price Index fell by 2.6% in the three months to June compared to the three months to May, from 2,968.49 to 2,9892.40. Compared to June 2012 the REINZ All Farm Price Index fell by 0.8%. 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.

Seven regions recorded increases in sales volume for the three months ended June 2013 compared to the three months ended June 2012. Waikato recorded the largest increase in sales (+29 sales), followed by Auckland (+26 sales) and Northland (+11 sales). Four regions recorded decreases in sales volume with Wellington recording the largest fall (-8 sales), followed by Nelson (-6 sales) and Southland (-3 sales). Compared to the three months ended May 2013 three regions recorded an increase in sales, lead by Nelson (+2 sales).

“Enquiry in all farm categories is consistently strong in all regions, in contrast to the normal seasonal pattern in winter,” says REINZ Rural Market Spokesman Brian Peacocke, “the limiting factor on farm sales is the availability of properties to meet demand, impacting on sales volumes in the latter part of the June quarter. In most regions farms that have been on the market for two to three years have now been sold”.

“In South Waikato dairy farms have been under strong competition. The final five Carter Holt dairy farms have been sold by tender with sharemilkers in place, with possession in mid-July. Notably these sales have occurred without Fonterra shareholdings. Strong regional demand has seen an increase in dairy farm values in Southland.”

“The increased dairy payout, lower New Zealand dollar and continuing low interest rates are the key drivers of increasing farm confidence across the country. As a result, all regions are reporting a shortage of listings, with those farms available for sale are attracting very strong attendance at open days, and multiple offers.”

Grazing properties accounted for the largest number of sales with 48.1% share of all sales over the three months to June, Dairy properties accounted for 13.9%, Finishing properties accounted for 19.4% and Horticulture properties accounted for 8.9% of all sales. These four property types accounted for 90.3% of all sales during the three months ended June 2013.

Dairy FarmsDairy FarmsDairy Farms
For the three months ended June 2013 the median sales price per hectare for dairy farms was $29,555 (66 properties), compared to $34,850, for the three months ended May (90 properties), and $27,919 (47 properties) for the three months ended June 2012. The median dairy farm size for the three months ended June 2013 was 132 hectares.

Included in sales for the month of June were 17 dairy farms at a median sale value of $19,631 per hectare. The median farm size was 169.5 hectares with a range of 56 hectares in Auckland to 764 hectares in Otago. The median production per hectare across all dairy farms sold in June 2013 was 729kgs of milk solids.

The REINZ Dairy Farm Price Index fell by 1.7% in the three months to June compared to the three months to May, from 1,7618.80 to 1,738.89. Compared to June 2012 the REINZ Dairy Farm Price Index fell by 8.0%. 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 FarmsFinishing Farms
For the three months ended June 2013 the median sale price per hectare for finishing farms was $18,672 (92 properties), compared to $17,903 for the three months ended May (106 properties), and $18,851 (82 properties) for the three months ended June 2012. The median finishing farm size for the three months ended June 2013 was 58 hectares.

Grazing Farms Grazing Farms Grazing Farms
For the three months ended June 2013 the median sales price per hectare for grazing farms was $13,831 (228 properties) compared to $13,443 for the three months ended May (235 properties), and $13,025 (205 properties) for the three months ended June 2012. The median grazing farm size for the three months ended June 2013 was 58 hectares.

Horticulture FarmsHorticulture FarmsHorticulture Farms
For the three months ended June 2013 the median sales price per hectare for horticulture farms was $120,345 (42 properties) compared to $128,248 (36 properties) for the three months ended May, and $130,208 (31 properties) for the three months ended June 2012. The median horticulture farm size for the three months ended June 2013 was six hectares.

Lifestyle PropertiesLifestyle PropertiesLifestyle Properties
The lifestyle property market saw an 18.2% (+271 sales) increase in sales volume in the three months to June 2013 compared to June 2012. 1,763 sales were recorded in the three months to June 2013 compared to 1,492 sales in the three months to June 2012. 81 fewer sales were recorded compared to the three months to May 2013 (-4.4%). For the 12 months to June 2013 there were 6,124 unconditional sales of lifestyle properties, an increase of 16.1% over the 12 months to June 2012.

10 regions recorded increases in sales compared to June 2012 while three recorded decreases in sales. Auckland recorded the largest increase (+135 sales), followed by Waikato (+35 sales) and Canterbury (+26 sales). Compared to May 2013, four regions recorded increases in sales with nine regions recording a decrease. Taranaki recorded the largest increase in sales (+18 sales), followed by Otago (+12 sales) and Southland Bay (+5 sales).

The national median price for lifestyle blocks rose by $27,500 (+5.8%) from $477,500 for the three months to June 2012 to $505,000 for the three months to June 2013. The median price for lifestyle blocks in Auckland rose by 10.2% in the year to June 2013, and rose by 10.8% in Waikato, however, the median price fell by 1.8% in Canterbury. Compared to May 2013 the median price eased by $4,500 (-0.9%) from $509,500 in May to $505,000 in June.

The number of days to sell for lifestyle properties eased by two days, from 67 days for the three months to the end of May to 69 days for the three months to the end of June. Compared to the three months ended June 2012 the number of days to sell improved by 15 days from 84 days to 69 days. Canterbury recorded the shortest number of days to sell in June at 47 days, followed by Taranaki at 52 days and Southland at 53 days. Gisborne recorded the longest number of days to sell at 105 days, followed by Manawatu/Wanganui at 94 days and Bay of Plenty at 92 days.

Commenting on the lifestyle property market Brian Peacocke said, “Increasing confidence and rising demand for properties is emerging in the lifestyle market with some regions reporting strong interest from buyers while at worst some are reporting a steady market.”

“The lifestyle market on the southern edge of the Auckland urban area is strong with interest in properties large enough for future sub-division and healthy activity in the $1 million range. Activity is also strong in central Waikato and around Hamilton with Auckland and ex-pat purchasers active. There have been a considerable number of appraisals carried out in the Waikato as vendors prepare for the spring market. Auckland buyers are also increasingly active in the Bay of Plenty.”

“The Canterbury market remains active in the $600,000 - $700,000 range, although quieter above $800,000 with buyers predominately coming from Christchurch City.”

REINZ All Farm Price Index – Additional DataREINZ All Farm Price Index – Additional DataREINZ All Farm Price Index – Additional Data
The table below sets out the returns for the REINZ All Farm Price Index for the three months ending June 2013.

The graph below shows the trends in the REINZ All Farm Price Index compared to an index of movements in the $/hectare measure of farm prices.

REINZ Dairy Farm Price Index – Additional DataREINZ Dairy Farm Price Index – Additional DataREINZ Dairy Farm Price Index – Additional Data
The table below sets out the returns for the REINZ Dairy Farm Price Index for the three months ending June 2013.

The graph below shows the trends in the REINZ Dairy Farm Price Index compared to an index of movements in the $/hectare measure of farm prices.

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