A Healthy Close To 2021

Data released today by the Real Estate Institute of New Zealand (REINZ) shows there were 256 fewer farm sales (-46.6%) for the three months ended December 2021 than for the three months ended December 2020. Overall, there were 293 farm sales in the three months ended December 2021, compared to 361 farm sales for the three months ended November 2021 (-18.8%), and 549 farm sales for the three months ended December 2020.

1,831 farms were sold in the year to December 2021, 235 more than were sold in the year to December 2020, with 84% more Dairy farms, 23.1% less Dairy Support, 7% more Grazing farms, 10% more Finishing farms and 14.7% less Arable farms sold over the same period.

The median price per hectare for all farms sold in the three months to December 2021 was $37,980 compared to $27,320 recorded for three months ended December 2020 (+39.0%). The median price per hectare increased 0.7% compared to November 2021.

The REINZ All Farm Price Index increased 2.8% in the three months to December 2021 compared to the three months to November 2021. Compared to the three months ending December 2020 the REINZ All Farm Price Index increased 21.8%. 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.

One region (Otago with +6 sales) recorded an increase in the number of farm sales for the three months ended December 2021 compared to the three months ended December 2020. Manawatu-Whanganui (-46 sales) and Waikato (-45 sales) recorded the biggest decreases in sales. Compared to the three months ended November 2021, no regions recorded an increase in sales.

Brian Peacocke, Rural Spokesman at REINZ says: “Sales figures for the three-month period ending December 2021 reflected an easing in volumes compared to similar periods over the last three years, with all categories being impacted.

“Logic would suggest that due to the very strong forecast for the dairy payout for the 2021-2022 season, and particularly strong prices for beef, lamb and horticultural products, fewer rural properties have been available for sale as landowners, as would be expected, have retained properties in order to capitalise on the current high product returns.

“Nevertheless, the total volume of farm sales for the 2021 calendar year increased considerably from 2020, again reinforcing the strong demand for continuing investment in rural land, that in itself being a reflection of confidence in the agricultural sector.

“On a balancing note however, whilst the banking sector is currently more amenable to backing soundly structured lending proposals, the inexorable grind of increasing costs, the shortage of quality labour and supply chain difficulties are well recognised constraints that continue to challenge the rural industry,” he concludes.

Points of Interest around New Zealand include:

Northland/ Auckland

A light spread of dairy farm sales but a good increase in sales of finishing and grazing properties throughout Northland and the Rodney district to the north of Auckland City. Prices remain at a constant level

Waikato/ King Country/ Taupo

An increase in dairy farm sales in December following strong results in November, with 35 sales in total for the two months, and prices for well-located, quality properties exceeding previous levels. Second and third tier dairy farms, however, struggled to attract support. Finishing properties, in particular, and good grazing properties throughout the wider provincial area continue to sell very well.

Bay of Plenty/ Rotorua

Steady sales of horticulture, dairy and finishing units across the region with Rotorua featuring more strongly than in previous months; the availability of stock in the kiwifruit sector appears insufficient to meet the demand.

Gisborne/ Hawkes Bay

Registrable activity across both districts in the arable, finishing and grazing sectors, with steady sales in the Hawkes Bay horticulture sector covering apples and grapes; Central Hawkes Bay contributed across each category including a well-sold dairy property in the Ashley Clinton district.

Taranaki

Good results with a solid lift in dairy farm sales, predominantly in the South Taranaki district, but well-spread sales of finishing and grazing properties across the province.

Manawatu/ Whanganui/ Tararua

A solid range of sales of fishing and grazing units at good prices in the Ruapehu and Rangitikei districts; lighter activity across the Manawatu, but a strong surge of sales across all categories with good prices achieved in the Tararua district. Horowhenua held up their hand up with sales of dairy support and equestrian properties.

Wairarapa/ Wellington

Consistent sales of finishing and grazing properties across the Wairarapa district; quiet in the neighbouring Wellington region.

Nelson/ Tasman/ Marlborough

Tasman district held the honours with good results in the finishing, grazing, horticulture, arable, dairy and forestry sectors; constrained results in the Marlborough district during December.

Canterbury/ West Coast

A strong performance throughout Canterbury province with a good level of sales at solid prices with dairy, dairy support, finishing, arable and grazing properties, with Selwyn, Ashburton and Timaru districts to the fore.

West Coast registered a good-sized dairy farm sale in the Buller district.

Otago

Consistently solid sales of grazing properties throughout the province, supported by more constrained results on finishing and arable units.

Southland

Well spread activity across the province with an increase in total sales at good prices in the dairy, dairy support, finishing, grazing and arable categories.

In December 2021, Finishing farms accounted for a 29% share of all sales. Grazing farms accounted for 22% of all sales, Dairy farms accounted for 17% of all sales and Horticulture farms accounted for 15% of all sales. These four property types accounted for 83% of all sales during the three months ended December 2021.

Dairy Farms

For the three months ended December 2021, the median sales price per hectare for dairy farms was $45,430 (50 properties), compared to $45,000 (63 properties) for the three months ended November 2021, and $33,250 (88 properties) for the three months ended December 2020. The median price per hectare for dairy farms has increased 36.6% over the past 12 months. The median dairy farm size for the three months ended December 2021 was 107 hectares.

On a price per kilo of milk solids basis, the median sales price was $36.41 per kg of milk solids for the three months ended December 2021, compared to $36.93 per kg of milk solids for the three months ended November 2021 (-1.4%), and $35.26 per kg of milk solids for the three months ended December 2020 (+3.3%).

The REINZ Dairy Farm Price Index decreased 4.9% in the three months to December 2021 compared to the three months to November 2021. Compared to December 2020, the REINZ Dairy Farm Price Index increased 8.8%. 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 December 2021, the median sale price per hectare for finishing farms was $38,110 (85 properties), compared to $37,020 (104 properties) for the three months ended November 2021, and $34,580 (178 properties) for the three months ended December 2020. The median price per hectare for finishing farms has increased 10.2% over the past 12 months. The median finishing farm size for the three months ended December 2021 was 39 hectares.

Grazing Farms

For the three months ended December 2021, the median sales price per hectare for grazing farms was $14,130 (65 properties), compared to $13,330 (79 properties) for the three months ended November 2021 and $10,555 (142 properties) for the three months ended December 2020. The median price per hectare for grazing farms has increased 33.9% over the past 12 months. The median grazing farm size for the three months ended December 2021 was 134 hectares.

Horticulture Farms

For the three months ended December 2021, the median sales price per hectare for horticulture farms was $304,430 (44 properties), compared to $241,625 (56 properties) for the three months ended November 2021 and $308,960 (59 properties) for the three months ended December 2020. The median price per hectare for horticulture farms has decreased 1.5% over the past 12 months. The median horticulture farm size for the three months ended December 2021 was 8 hectares.

ENDS

Real Estate Institute of New Zealand

For more real estate information and market trends data, visit www.reinz.co.nz. For New Zealand's most comprehensive range of listings for residential, lifestyle, rural, commercial, investment and rental properties, visit www.realestate.co.nz - REINZ's official property directory website.

Editor’s 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 December 2021 refer to the period from 1 October 2021 to 31 December 2021.

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.

From March 2021 there has been a change in the methodology for calculating rural statistics. To date, the rural statistics have referred to a Return Period which is the month in which a sale record was submitted to REINZ. Going forward, the rural statistics will refer to an Unconditional Month i.e., the month in which the sale went unconditional. This change in methodology ensures that sales that took place in April, for instance, are recorded against April even if they were submitted to REINZ late. The change also brings Rural statistics calculation into line with the Residential statistics calculation, where the Unconditional Month approach has been used successfully to calculate Residential Statistics for several years now. The Unconditional Month methodology also ensures that the most up-to-date state of the REINZ database is reported at the time the data is released with revision of prior months statistics often occurring to reflect the submission of late data or sale amendments that took place after the prior statistics release.

In addition to the calculation period change there are two additional changes to the data worth noting:

1. 12 Districts have been replaced by 13 Regions. These are consistent with the parts of the residential press release and it has been done to be consistent with regional definitions outside REINZ e.g., Statistics NZ

2. Dairy Support is a new farm category and we now have the ability to separate Lifestyle Blocks into Bareland and Farmlets.

If you have any questions regarding this change in methodology, please email statistics@reinz.co.nz.

© Scoop Media