Recommended NZ | Guide to Money | Gimme: Competitions - Giveaways

REINZ: Sales volumes ease

Contributor:
Fuseworks Media
Fuseworks Media

Data released today by the Real Estate Institute of New Zealand (REINZ) shows there were 14 less farm sales (-3.6%) for the three months ended February 2019 than for the three months ended February 2018. Overall, there were 370 farm sales in the three months ended February 2019, compared to 420 farm sales for the three months ended January 2019 (-11.9%), and 384 farm sales for the three months ended February 2018. 1,472 farms were sold in the year to February 2019, 3.6% fewer than were sold in the year to February 2018, with 24.1% less dairy farms, 11.6% more grazing farms, 5.8% less finishing farms and 4.2% fewer arable farms sold over the same period.

The median price per hectare for all farms sold in the three months to February 2019 was $22,462 compared to $27,523 recorded for three months ended February 2018 (-18.4%). The median price per hectare fell 17.1% compared to January 2019.

The REINZ All Farm Price Index rose 1.2% in the three months to February 2019 compared to the three months to January 2019. Compared to February 2018 the REINZ All Farm Price Index rose 12.9%. 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.

Eight of the 14 regions recorded increases in the number of farm sales for the three months ended February 2019 compared to the three months ended February 2018. Taranaki (+8), Hawke’s Bay (+7) and Gisborne (+6) were the top regions to increase the number of farm sales compared to February 2018. Bay of Plenty recorded the most substantial decline in sales (-16 sales) followed by Otago (-11 sales). Compared to the three months ended January 2019, four regions recorded an increase in sales with the biggest increase being in Taranaki (+4 sales). Brian Peacocke, Rural Spokesman, at REINZ says: "The easing in total sales volumes for the three month period ending February 2019 is the main point contained in the sales data just released, particularly so for the dairy sector.

"Weather conditions have again been a major influence with a booming later spring followed quickly by an extremely dry summer period leading into semi-drought and fire hazard conditions in many parts of the country.

"Healthy product returns continue to reward diligent producers with real strength being shown in the beef, lamb, grain, timber and horticultural categories and partly in response to a weather-induced reduction in dairy output, pleasing improvements in the Global Dairy Trade auction prices for the dairy sector.

"For some farmers, however, those returns have not been sufficient to change their decision to exit the rural industry, as evidenced by the high number of farms on the market in recent months, these decisions in turn being based on frustrations relating to issues including, but not limited to, labour, compliance and margin-squeezing cost increases," he concludes.

Points of Interest around New Zealand include:

Northland - strong activity surrounding greenfield sites for kiwifruit developments and where water consents are able to be obtained, for avocado plantings; good enquiry for forestry blocks and quality beef properties; light activity in the dairy sector with continuing evidence of second tier dairy farms changing to beef

Waikato - a distinct easing of sales in the dairy sector compared to equivalent periods in 2017 and 2018; of the large number of dairy farms for sale during the spring throughout the wider Waikato Region, approximately 1/3 have sold; simmering activity for good finishing and grazing properties with indications emerging of the likelihood of increased plantings of gold kiwifruit where licenses can be obtained

Bay of Plenty/Rotorua - steady sales at good prices for quality kiwifruit orchards; strong prices for finishing properties Rotorua and one strong dairy sale in the Reporoa district

Taranaki - probably the steadiest of the dairy areas with consistent sales at solid prices; good sales results for finishing and grazing units

Manawatu/Wanganui - steady activity in the finishing and grazing categories and a light registration of arable sales

Hawke’s Bay - a good level of grazing property sales; lesser activity on finishing units and one particularly strong sale in the horticultural sector

Wairarapa/Wellington - harder work with limited listings in the drystock sector; very quiet on the dairy front

Nelson/Marlborough - solid activity and strong prices for quality finishing units; fewer sales of grazing properties and quiet in the horticultural sector

Canterbury - difficult conditions with only two dairy farm sales registered in the last 7 months within the province; reasonable activity in the finishing and grazing categories in both North and South Canterbury albeit some vendors have unrealistic expectations; reports of bank constraints causing difficulties with some transactions; restrictions on irrigation schemes are having a negative impact in North Canterbury, mid and South Canterbury supplies not impacted at this stage

Otago - restrained activity in the drystock sector where prices have eased 10% to 15% - reports of capital constraints from banks making finance difficult to obtain and therefore harder to get transactions together

Southland - a good selection of dairy farms available, limited sales results compared with previous years albeit two sales of larger dairy units are significant in terms of total price involved; a good level of activity on finishing properties, lesser so in the grazing sector with reports of prices across the board being under pressure.

Grazing farms accounted for the largest number of sales with a 34% share of all sales over the three months to February 2019, Finishing farms accounted for 29%, Dairy accounted for 15%, and Horticulture properties accounted for 10% of all sales. These four property types accounted for 87% of all sales during the three months ended February 2019.

Dairy Farms

For the three months ended February 2019, the median sales price per hectare for dairy farms was $35,807 (55 properties), compared to $38,642 (69 properties) for the three months ended January 2019, and $34,238 (89 properties) for the three months ended February 2018. The median price per hectare for dairy farms has increased 4.6% over the past 12 months. The median dairy farm size for the three months ended February 2019 was 120 hectares.

On a price per kilo of milk solids basis the median sales price was $37.87 per kg of milk solids for the three months ended February 2019, compared to $40.28 per kg of milk solids for the three months ended January 2019 (-6.0%), and $37.45 per kg of milk solids for the three months ended February 2018 (+1.1%).

The REINZ Dairy Farm Price Index decreased 8.6% in the three months to February 2019 compared to the three months to January 2019. Compared to February 2018, the REINZ Dairy Farm Price Index rose 8.4%. 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 February 2019, the median sale price per hectare for finishing farms was $28,872 (106 properties), compared to $29,587 (136 properties) for the three months ended January 2019, and $30,656 (113 properties) for the three months ended February 2018. The median price per hectare for finishing farms has fallen 5.8% over the past 12 months. The median finishing farm size for the three months ended February 2019 was 55 hectares.

Grazing Farms For the three months ended February 2019, the median sales price per hectare for grazing farms was $9,700 (124 properties) compared to $10,295 (118 properties) for the three months ended January 2019 and $10,827 (101 properties) for the three months ended February 2018. The median price per hectare for grazing farms has fallen 10.4% over the past 12 months. The median grazing farm size for the three months ended February 2019 was 169 hectares.

Horticulture Farms

For the three months ended February 2019, the median sales price per hectare for horticulture farms was $164,176 (36 properties) compared to $160,618 (41 properties) for the three months ended January 2019 and $254,722 (41 properties) for the three months ended February 2018. The median price per hectare for horticulture farms has dropped 35.5% over the past 12 months. The median horticulture farm size for the three months ended February 2019 was 9 hectares.

All articles and comments on Voxy.co.nz have been submitted by our community of users. Please notify us through our contact form if you believe an item on this site breaches our community guidelines.