Real Estate Institute Of New Zealand (REINZ) Data Reveals Shifts In New Zealand Farm Sales For July 2024

30 August 2024  

The Real Estate Institute of New Zealand (REINZ) recently shared the July 2024 rural  sales data. According to the data, there were 228 farm sales in the three months  leading up to July 2024, which is more than the 217 in the previous quarter and 214  in the same period last year. This means there was a 6.5% increase compared to the  same time frame the year before, and a 5.1% rise from the previous quarter. 

In the three months to July 2024, a total of 910 farms were sold, 193 less than the  previous year. The breakdown includes 24% fewer Dairy farms, 7.3% fewer Dairy  Support farms, 32% fewer Grazing farms, and 24% fewer Finishing farms. On the plus  side, there was a 7% increase in Arable farm sales. 

The median price per hectare for farms sold in the three months to July 2024 was  $26,755, down 6.8% from $28,700 in the same period last year, which represents a  3.6% decrease compared to the previous quarter. 

Shane O’Brien, Rural Spokesman at REINZ, commented on the regional dynamics,  stating: "While the total sales volumes were similar year on year, there was a  noticeable lift in recorded sales in Northland, Auckland, Canterbury and Southland." 

The REINZ All Farm Price Index, which takes into account differences in farm size,  location, and type, went up by 0.8% from the last quarter but dropped by 10.7%  compared to last year. 

In terms of regions, 7 areas had more farm sales compared to July 2023, with  Auckland (+12 sales) and Southland (+11 sales) leading the increase. On the flip side,  West Coast and Otago saw the biggest decreases (-11 sales). Compared to the  previous quarter, 6 regions experienced increased sales, with Manawatu-Whanganui  (+10 sales) and Northland (+5 sales) showing the most significant gains. 

Grazing farms made up 29% of all sales, Finishing farms 20%, Dairy farms 11%, and  Arable farms also contributed 11%. Combined, these four types of farms accounted  for 70% of all sales during the three months ending July 2024. 

“While sales activity remained subdued over the winter months, there were green  shoots starting to appear in the market on the back of the recently announced  increase in Fonterra payout for 2024/25 season and a reduction in farm lending 

interest rates – two key factors in buying decisions. The signalling of ongoing interest  rate reductions is giving buyers some renewed confidence along with the payout  news, and while we are yet to see this manifest in increased sales activity, many  agents across New Zealand are reporting more inquiry and early Spring activity as we  lead into the normally busy months leading to Christmas.” 

Despite these green shoots we are seeing activity around pastoral farming remain  low on the back of very dry seasons in the top half of the South Island and low sheep  meat prices. The beef sector is buoyed by the beef prices and outlook. 

All farm buyers remain cautious with buying decisions and are remaining very  cognisant of on-farm environmental compliance, farm working costs, and interest  rates when assessing farms in this market.  

Dairy Farms 

The median price per hectare was $35,705 for the three months ending July 2024,  down from $36,650 in the previous quarter and $38,160 a year ago. This reflects a  6.4% decrease over the past 12 months. The median price per kilo of milk solids was  $35.00 for July 2024, up from $30.00 in June 2024 and $31.94 a year ago, marking  increases of 16.7% and 9.6%, respectively.  

The REINZ Dairy Farm Price Index increased by 13.1% from the previous quarter and  12% from July 2023. 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 finishing farms, the median price per hectare was $33,520 (45 properties), a  slight decrease from $33,775 (42 properties) in the previous quarter and $34,690 (65  properties) in July 2023. This shows a 3.4% decline over the past year. The median  size for finishing farms for the three months ending July 2024 was 34 hectares. 

Grazing Farms 

In July 2024, grazing farms had a median price per hectare of $15,600 (67  properties), an increase from $14,705 (62 properties) in June 2024 and $13,570 (56  properties) for the three months ending July 2024. This represents a 15.0% increase  over the past 12 months, with a median size of 80 hectares. 

Horticulture Farms 

In July 2024, the median sales price for horticulture farms was $245,630, with 22  properties sold. This is compared to $363,300 (12 properties) in June 2024 and  $459,770 (22 properties) in July 2023. The median price per hectare for horticulture 

farms has decreased by 46.6% over the past 12 months. Additionally, the median  horticulture farm size for July 2024 was 7 hectares.

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 July 2024 refer to the period from 1 May 2024 to 31 July  2024. 

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.

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