Enquiry Remains Strong For Quality Property

News Release 18 October 2013

Enquiry Remains Strong For Quality Property

Summary

Data released today by the Real Estate Institute of NZ (“REINZ”) shows there were 73 more farm sales (+27.1%) for the three months ended September 2013 than for the three months ended September 2012. Overall, there were 342 farm sales in the three months to end of September 2013, compared to 369 farm sales for the three months ended August 2013 (-7.3%). 1,574 farms were sold in the year to September 2013, 10.5% more than were sold in the year to September 2012.

The median price per hectare for all farms sold in the three months to September 2013 was $22,851 compared to $18,041 recorded for three months ended September 2012. The median price per hectare rose 5.4% compared to August.

The REINZ All Farm Price Index rose by 7.2% in the three months to September compared to the three months to August, from 2,980.9 to 3,194.8. Compared to September 2012 the REINZ All Farm Price Index rose by 17.9%. 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.

10 regions recorded increases in sales volume for the three months ended September 2013 compared to the three months ended September 2012. Bay of Plenty recorded the largest increase in sales (+23 sales), followed by Waikato (+14 sales) and Southland (+12 sales). Three regions recorded decreases in sales volume with Nelson recording the largest fall (-11 sales), followed by Canterbury (-8 sales) and Gisborne (-3 sales). Compared to the three months ended August 2013 five regions recorded an increase in sales.

“The September quarter is the peak work load period for the majority of farmers and as a result farm sales for the period have been moderate”, says REINZ Rural Spokesman Brian Peacocke, “Prices for the reduced number of sales remain steady for dairy and grazing properties, with a slight easing in the median sale price for finishing properties. Sales volumes and prices of horticultural properties have remained constant over recent months.”

“Of note this month is the consistent level of sales for finishing properties in the lower South Island, particularly Otago and Southland, where demand for good dairy support properties remains strong.”

“Enquiry is particularly focused on quality properties with a clear emphasis on location, contour and standard of improvements. Where a property requires investment, purchasers are carefully assessing the costs and impact on the price they are prepared to pay.”

Grazing properties accounted for the largest number of sales with 39.8% share of all sales over the three months to September, Finishing properties accounted for 27.2%, Horticulture properties accounted for 10.8% and Dairy properties accounted for 8.2% of all sales. These four property types accounted for 86.0% of all sales during the three months ended September 2013.

Dairy Farms
For the three months ended September 2013 the median sales price per hectare for dairy farms was $34,912 (28 properties), compared to $32,234, for the three months ended August (35 properties), and $19,604 (9 properties) for the three months ended September 2012. The median dairy farm size for the three months ended September 2013 was 149 hectares.

Included in sales for the month of September were 10 dairy farms at a median sale value of $43,013 per hectare. The median farm size was 144 hectares with a range of 45 hectares in Waikato to 443 hectares in Otago. The median production per hectare across all dairy farms sold in September 2013 was 1,016 kgs of milk solids.

The REINZ Dairy Farm Price Index rose by 0.4% in the three months to September compared to the three months to August, from 1,776.1 to 1,782.5. Compared to September 2012 the REINZ Dairy Farm Price Index rose by 8.3%. 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 Farms
For the three months ended September 2013 the median sale price per hectare for finishing farms was $25,388 (93 properties), compared to $26,107 for the three months ended August (94 properties), and $22,468 (45 properties) for the three months ended September 2012. The median finishing farm size for the three months ended September 2013 was 50 hectares.

Grazing Farms
For the three months ended September 2013 the median sales price per hectare for grazing farms was $17,517 (136 properties) compared to $16,744 for the three months ended August (156 properties), and $11,444 (140 properties) for the three months ended September 2012. The median grazing farm size for the three months ended September 2013 was 45 hectares.

Horticulture Farms
For the three months ended September 2013 the median sales price per hectare for horticulture farms was $127,667 (37 properties) compared to $127,667 (37 properties) for the three months ended August, and $141,968 (37 properties) for the three months ended September 2012. The median horticulture farm size for the three months ended September 2013 was seven hectares.

Lifestyle Properties
The lifestyle property market saw a 23.0% (+308 sales) increase in sales volume in the three months to September 2013 compared to September 2012. 1,647 sales were recorded in the three months to September 2013 compared to 1,339 sales in the three months to September 2012. 31 fewer sales were recorded compared to the three months to August 2013 (-1.8%). For the 12 months to September 2013 there were 6,522 unconditional sales of lifestyle properties, an increase of 20.7% (+1,090 sales) over the 12 months to September 2012.

13 regions recorded increases in sales compared to September 2012 while one recorded a decrease in sales. Auckland recorded the largest increase (+73 sales), followed by Canterbury (+62 sales) and Northland (+49 sales). Compared to August 2013, three regions recorded an increase in sales with nine regions recording decreases.

The national median price for lifestyle blocks rose by $30,000 (+6.7%) from $450,000 for the three months to September 2012 to $480,000 for the three months to September 2013. The median price for lifestyle blocks in Auckland rose by 26.3% in the year to September 2013 to reach a new record high. The median price rose by 6.7% in Waikato, and by 1.1% in Canterbury. Compared to August 2013 the median price fell by $5,000 (-1.0%) from $485,000 in August to $480,000 in September.

The number of days to sell for lifestyle properties eased by one day, from 77 days for the three months to the end of August to 78 days for the three months to the end of September. Compared to the three months ended September 2012 the number of days to sell improved by three days from 81 days to 78 days. Gisborne recorded the shortest number of days to sell in September at 38 days, followed by Southland at 45 days and Taranaki at 48 days. Nelson and West Coast recorded the longest number of days to sell at 163 days, followed by Northland at 118 days and Hawkes Bay at 116 days.

Commenting on the lifestyle property market Brian Peacocke said, “While the volume of lifestyle property sales has eased slightly in the September quarter activity around the country continues at a level well ahead of that 12 months ago. Strong buyer interest remains within close proximity to the major cities with a shortage of listings starting to emerge”

“In the South Island, the Christchurch lifestyle market appears to be experiencing an easing of the surge to the lifestyle areas further away from the city, partly driven by the resulting traffic congestion at key entry points, and partly by the forthcoming availability of subdivisional land closer to the city.”

Factors influencing the residential market continue to impact on the overall lifestyle market.

REINZ 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 September 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.

Click for big version.

REINZ 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 September 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.

Click for big version.

REINZ_Rural_Market_Statistics_September_2013.pdf

ENDS

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