Real Estate Institute Of New Zealand (REINZ) Report Highlights Shifts In Farm Sales And Prices

Check out the latest report from the Real Estate Institute of New Zealand (REINZ), which uncovers interesting shifts in farm sales and prices for August 2024.

There were 33 more farm sales, reflecting an 18.9% increase for the three months ending in August 2024 compared to the same period in 2023, bringing the total to 208. However, this is a 10% decrease from the 231 sales recorded to the three months ending July 2024, while still showing an increase from 175 sales last year.

In total, 923 farms were sold in the year leading up to August 2024, a decline of 166 farms compared to the previous year.

Shane O'Brien, Rural Spokesman at REINZ, noted: “Despite the headwinds currently being faced by much of the rural sector, it is encouraging to see sales levels similar to the previous two years, with 57 sales recorded in August this year as compared to 55 and 51 sales for the same month in 2022 and 2023, respectively. August is traditionally a slow month for sales as many sellers wait for the warmer Spring months and the traditionally busier selling months of October to December.”

The REINZ All Farm Price Index showed stability with a slight decrease of only 2.1% in the three months leading up to August 2024 compared to July and a decline of 3.2% compared to August 2023. This index adjusts for differences in farm size, location, and type.

Regional dynamics were significant, with nine regions experiencing an increase in farm sales compared to last year. Notable increases were seen in Auckland (+13 sales), Manawatu-Whanganui, and Canterbury (+11 sales), while Otago (-12 sales) and West Coast (-7 sales) recorded declines.

There were also shifts in the types of farms sold. Dairy farms decreased by 24.7%, Dairy Support farms dropped by 10.8%, and Grazing farms fell by 26.3%. In contrast, Arable farms increased by 16.3%.

“Many agents across the country are reporting increased enquiries during the month, with many tipping, so there could be some renewed confidence among buyers towards the dairy and dairy support sectors of the market,” commented O’Brien.

The median price per hectare for all farms sold in the three months ending August 2024 was $28,625, a significant increase of 15.8% from $24,720 last year and up by 7.8% compared to July.

Five regions recorded an increase in sales compared to the three months ending July 2024, notably Bay of Plenty (+6 sales) and Auckland (+3 sales).

In August 2024, Grazing farms accounted for 33% of all sales, Finishing farms comprised 16%, Horticulture farms represented 11%, and Dairy Support farms comprised 9%. Together, these four types accounted for an impressive 69% of all farm sales.

“Many agents across the country are predicting a busy end to the year as some sectors reset on the back of stronger markets and better weather,” adds O’Brien.

Dairy Farms

For the three months ending August 2024, the median sales price per hectare for dairy farms was $36,930 (18 properties), compared to $35,705 (24 properties) for the three months ending July 2024 and $35,960 (15 properties) for the three months ending August 2023. The median price per hectare for dairy farms has increased 2.7% over the past 12 months. The median dairy farm size for the three months ended August 2024 was 87 hectares.

On a price per kilo of milk solids basis, the median sales price was $45.19 per kg of milk solids for the three months ended August 2024, compared to $35.00 per kg of milk solids for the three months ended July 2024 (+29.1%), and $28.24 per kg of milk solids for the three months ended August 2023 (+60.0%).

The REINZ Dairy Farm Price Index increased by 5.3% in the three months ending August 2024 compared to the three months ending July 2024. In comparison to August 2023, the index increased by 28.5%. The REINZ Dairy Farm Price Index adjusts for differences in farm size and location compared to the median price per hectare, which does not account for these factors.

Finishing Farms

For the three months ended August 2024, the median sale price per hectare for finishing farms was $33,520 (33 properties), compared to $32,905 (48 properties) for the three months ended July 2024 and $34,960 (53 properties) for the three months ended August 2023.

The median price per hectare for finishing farms has decreased by 4.1% over the past 12 months. The median finishing farm size for the three months ended August 2024 was 32 hectares.

Grazing Farms

For the three months ended August 2024, the median sales price per hectare for grazing farms was $16,080 (69 properties), compared to $15,600 (67 properties) for the three months ended July 2024 and $11,700 (43 properties) for the three months ended August 2023.

The median price per hectare for grazing farms has increased 37.4% over the past 12 months. The median grazing farm size for the three months ended August 2024 was 57 hectares.

Horticulture Farms

For the three months ended August 2024, the median sales price per hectare for horticulture farms was $245,630 (22 properties), compared to $245,630 (22 properties) for the three months ended July 2024 and $444,310 (22 properties) for the three months ended August 2023. The median price per hectare for horticulture farms has decreased 44.7% over the past 12 months. The median horticulture farm size for the three months ended August 2024 was 7 hectares.

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