Sales Volumes Reflect Cautious Confidence

Sales Volumes Reflect Cautious Confidence In The Rural Sector

Summary

Data released today by the Real Estate Institute of NZ (“REINZ”) shows there were 62 fewer farm sales (-11%) for the three months ended May 2015 than for the three months ended May 2014. Overall, there were 502 farm sales in the three months to end of May 2015, compared to 485 farm sales for the three months ended April 2015 (+3.5%) and 564 farm sales for the three months to the end of May 2014. 1,747 farms were sold in the year to April 2015, 7.1% fewer than were sold in the year to May 2014.

The median price per hectare for all farms sold in the three months to May 2015 was $28,563 compared to $25,018 recorded for three months ended May 2014 (+14.2%). The median price per hectare fell 0.4% compared to April.

The REINZ All Farm Price Index rose 3.6% in the three months to May compared to the three months to April. Compared to May 2014 the REINZ All Farm Price Index rose by 4.6%. The REINZ All Farm Price Index adjusts for differences in farm size, location and farming type, unlike the median price per hectare, which does not adjust for these factors.

Four regions recorded increases in sales volume for the three months ended May 2015 compared to the three months ended May 2014. Auckland recorded the largest increase in sales (+12 sales), followed by Bay of Plenty (+10 sales) and Gisborne (+4 sales). Compared to the three months ended April 2015, six regions recorded an increase in sales.

“While sales volumes for the three months ending May 2015 eased compared to the previous, period”, says REINZ Rural Spokesman Brian Peacocke, “activity across most categories remained surprisingly strong with the main limitation being the shortage of available properties.”

“Given the time of the year, when most dairy farm settlements take place at the beginning of June and farmers are focused on wintering activities, such a shortage is expected and is likely to remain in place until spring.”

Highlights include:

• Ongoing dairy sales in Northland, Waikato, Taranaki and Southland;
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• Solid activity in finishing farms in the Auckland, Waikato and Canterbury regions;
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• Strong sales of grazing properties in Northland, Auckland, Manawatu/ Wanganui, Canterbury and Southland;
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• Continuing strong horticultural sales in the Bay of Plenty, with steady activity in the Nelson / Marlborough area; and
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• A lift in arable sales in the Canterbury and Otago provinces.
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Grazing properties accounted for the largest number of sales with 42.8% share of all sales over the three months to May 2015, Dairy properties accounted for 17.3%, Finishing properties accounted for 15.3% and Horticulture properties accounted for 13.9% of all sales. These four property types accounted for 89.4% of all sales during the three months ended May 2015.

Dairy Farms

For the three months ended May 2015 the median sales price per hectare for dairy farms was $35,281 (87 properties), compared to $38,802 for the three months ended April 2015 (97 properties), and $33,543 (95 properties) for the three months ended May 2014. The median dairy farm size for the three months ended May 2015 was 110 hectares.

Included in sales for the month of May were 23 dairy farms at a median sale value of $35,759 per hectare. The median farm size was 147 hectares with a range of 17 hectares in Bay of Plenty to 625 hectares in Taranaki. The median production per hectare across all dairy farms sold in May 2015 was 959 kgs of milk solids.

The REINZ Dairy Farm Price Index fell by 4.3% in the three months to May compared to the three months to April. Compared to May 2014, the REINZ Dairy Farm Price Index rose by 11.1%. 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 Farms

For the three months ended May 2015 the median sale price per hectare for finishing farms was $27,534 (77 properties), compared to $20,966 for the three months ended April 2015 (77 properties), and $22,692 (122 properties) for the three months ended May 2014. The median finishing farm size for the three months ended May 2015 was 46 hectares.

Grazing Farms

For the three months ended May 2015 the median sales price per hectare for grazing farms was $16,638 (215 properties) compared to $16,741 for the three months ended April 2015 (192 properties), and $15,833 (228 properties) for the three months ended May 2014. The median grazing farm size for the three months ended May 2015 was 57 hectares.

Horticulture Farms

For the three months ended May 2015 the median sales price per hectare for horticulture farms was $247,549 (70 properties) compared to $266,883 (73 properties) for the three months ended April 2015, and $186,250 (55 properties) for the three months ended May 2014. The median horticulture farm size for the three months ended May 2015 was five hectares.

Lifestyle Properties

The lifestyle property market saw a 17.4% lift (+306 sales) in sales volume in the three months to May 2015 compared to May 2014. 2,063 sales were recorded in the three months to April 2015 compared to 1,757 sales in the three months to May 2014; with May 2015 recording the highest number of sales in a three-month period since May 2007. 123 more sales were recorded compared to the three months to April 2015. For the 12 months to May 2015 there were 6,760 unconditional sales of lifestyle properties, an increase of 2.5% (+166 sales) over the 12 months to May 2014.

10 regions recorded an increase in sales compared to May 2014 while four recorded decreases in sales. Auckland recorded the largest increase in sales (+143) in the three months to May 2015 compared to May 2014, Northland saw an increase of 62 sales and Bay of Plenty saw an increase of 53 sales. Compared to April 2015, 11 regions recorded an increase in sales with three regions recording a decrease.

The national median price for lifestyle blocks rose by $32,500 (+6.2%) from $527,500 for the three months to May 2014 to $560,000 for the three months to May 2015, a new record national median price for lifestyle blocks. The median price for lifestyle blocks in Auckland rose by $82,500 (+9.1%) from $902,500 for the three months to May 2014 to $985,000 for the three months to May 2015. Over the same time period, the median price fell by 2% in Waikato to $485,000 and rose by 3.2% in Canterbury to $562,500. Compared to April 2015, the national median sales price rose by $7,500 (+1.4%).

The median number of days to sell for lifestyle properties improved by eight days, from 74 days for the three months to the end of April to 66 days for the three months to the end of May. Compared to the three months ended May 2014 the median number of days to sell improved by five days. Auckland recorded the shortest number of days to sell in May 2015 at 44 days, followed by Canterbury at 51 days and Wellington and Waikato at 63 days. Nelson recorded the longest number of days to sell at 123 days, followed by Hawkes Bay at 113 days, and Bay of Plenty at 105 days.

Commenting on the lifestyle property market Brian Peacocke said, “The three months period ending May 2015 was notable for the strong uplift in sales volumes and an incremental increase in prices.”

“A number of regions throughout the North Island featured with solid increases recorded in the Northland, Auckland, Waikato, Taranaki, Manawatu/Wanganui and Hawkes Bay regions. Nelson/Marlborough and Southland were standout areas in the South Island. From a national perspective, the overall level of activity signals a healthy climate in the lifestyle sector.”

ENDS

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