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

Agriculture continues to anchor the economy - REINZ

Contributor:
Fuseworks Media
Fuseworks Media

Data released today by the Real Estate Institute of New Zealand (REINZ) shows there were 85 fewer farm sales (-19.1%) for the three months ended November 2021 than for the three months ended November 2020. Overall, there were 361 farm sales in the three months ended November 2021, compared to 258 farm sales for the three months ended October 2021 (+39.9%), and 446 farm sales for the three months ended November 2020. In the year to November 2021, 1,616 farms sold, 238 more than were sold in the year to November 2020. Over that period, there were 105.8% more dairy farms, 23.9% less dairy support, 10% more grazing farms, 13.9% more finishing farms and 32.3% fewer arable farms sold.

The median price per hectare for all farms sold in the three months to November 2021 was $37,710 compared to $27,740 recorded for three months ended November 2020 (+35.9%). The median price per hectare increased 10.3% compared to October 2021.

The REINZ All Farm Price Index increased 4.6% in the three months to November 2021 compared to the three months to October 2021. Compared to the three months ending November 2020, the REINZ All Farm Price Index increased 21.5%. 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.

Two regions recorded an increase in the number of farm sales for the three months ended November 2021 compared to the three months ended November 2020, these were Otago (+15 sales) and Southland (+4 sales).

Manawatu/Whanganui (-19 sales) and Gisborne/Hawke’s Bay (-16 sales) recorded the greatest decreases in sales. Compared to the three months ended October 2021, 12 regions recorded an increase in sales, the most notable being Waikato (+27 sales) and Otago (+14 sales).

Brian Peacocke, Rural Spokesperson at REINZ says: "Sales results for the three-month period ending 30 November 2021, with a strong increase in sales volumes and values, confirms the strength and resilience of the agricultural sector and the irreplaceable value of its contribution to the New Zealand economy.

"The solid surge in activity is a definitive reaffirmation of the appeal of agricultural investment, not particularly for the return on investment, but specifically for the security of investment.

"Increases in product returns across the board are spearheaded by the dairy sector, which is orbiting a record price for the current season. Hot on its heels is the horticulture sector, with strong returns appealing to the investment sector, such investment now pushing the boundaries of land and the orchard prices in both the traditional regions and areas such as Northland and the Waikato, where a spillover of investment capital is well underway.

"The pastoral sector is well represented with strong prices for beef and lamb, which in turn is creating sufficient demand for suitable land that price boundaries are being continually challenged.

"However, the ever-present dangers of increasing costs, availability of labour and COVID-19 imposed constraints remain a constant challenge.

"Regrettably, inflationary pressures in the wider economy are resulting in moves from the Central Bank and Trading Banks to dampen down such pressures, and the resulting impact from already increasing interest rates and an onerous tax take from Central Government is again running the risk of killing the goose that lays the golden egg," he concludes.

Points of Interest from around the country include the following:

Northland/Auckland

A healthy lift in sales volumes throughout Northland, particularly in the finishing and grazing categories, albeit a number of those were smaller properties; prices reflect quality.

The Auckland region experienced a similar response with a good level of sales of finishing properties.

Waikato/King Country/Taupo

A big lift in sales of dairy farms throughout the greater Waikato, the highest number for some time, with some particularly strong prices paid, such prices frequently assisted by strong competition from adjoining landowners; kiwifruit developers are competing strongly for suitable land, with the mix of contour, soil type and sufficient water supply being some of the criteria and therefore the constraints; sales of good finishing properties were strong with competition resulting in high prices for specific units; light activity in North King Country, very light in the Taupo district.

Bay of Plenty/Rotorua

Strong sales of horticultural properties in the Bay of Plenty with exceptional prices paid for top quality gold kiwifruit orchards; smaller avocado orchard sales were noted in the Western Bay of Plenty; long awaited activity in the Rotorua district with an improved level of sales of dairy and finishing units in the Reporoa and Atiamuri districts where prices were steady.

Gisborne/Hawke’s Bay

A similar lift in activity in the Gisborne region where sales of horticulture properties were similar in volume to grazing units; activity covered the central and coastal districts.

Smaller finishing units featured in Hawke’s Bay with activity spread over central regions.

Taranaki

A good lift in sales volumes from previous months with dairy properties dominating volumes but dairy support and finishing units clearly dominating the price per hectare; good competition throughout.

Manawatu/Whanqanui/Tararua

The improved activity theme continued moving south, with well-sold finishing and dairy support properties featuring in the Ruapehu, Manawatu and Tararua districts: not to be outdone, Tararua featured even more strongly with a full range of sales covering dairy, dairy support, finishing and grazing units.

Wairarapa/Wellington

A blank scoresheet in the Wairarapa followed by a single sale of a finishing unit at Pukerua Bay which saved Wellington from going out for a duck.

Nelson/Marlborough

Several solid vineyard sales kept Marlborough on the scoreboard with lighter activity being registered in outer field of Tasman.

Canterbury/West Coast

Well spread results throughout Canterbury with Hurunui District in particular featuring strongly with sales of arable, horticulture, finishing, grazing and dairy properties; Dairy unit sales were a feature for the Selwyn district, plus a good dairy sale in Ashburton; steady dry stock activity in the Timaru district and to the south, Waimate flew the flag with a strong sale of a substantial breeding property.

West Coast kept their powder dry with just one grazing unit run on the board.

Otago

Vigorous results for a vigorous province with a good range of sales of dairy support, dairy and finishing units in the Waitaki district, pursued strongly by Central Otago where finishing and grazing unit sales were dominated by the horticulture sector, the highlight being a very strong sale a small cherry orchard; Queenstown Lakes registered on the finishing front, but Clutha was the dominant factor for the province with a full range of sales of dairy, dairy support, arable, finishing and grazing properties.

Southland

A strong level of finishing sales in the multi-talented Southland region was the dominant feature for the province, backed up by good results on dairy units, grazing blocks and unusually, sales of a deer unit and a grass-harvesting property.

In November 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 16% of all sales. These four property types accounted for 84% of all sales during the three months ended November 2021.

Dairy farms

For the three months ended November 2021, the median sales price per hectare for dairy farms was $45,000 (63 properties), compared to $44,740 (34 properties) for the three months ended October 2021, and $33,210 (49 properties) for the three months ended November 2020. The median price per hectare for dairy farms has increased 35.5% over the past 12 months. The median dairy farm size for the three months ended November 2021 was 97 hectares.

On a price per kilo of milk solids basis, the median sales price was $36.93 per kg of milk solids for the three months ended November 2021, compared to $37.59 per kg of milk solids for the three months ended October 2021 (-1.8%) and $35.29 per kg of milk solids for the three months ended November 2020 (+4.6%).

The REINZ Dairy Farm Price Index decreased 0.2% in the three months to November 2021 compared to the three months to October 2021. Compared to November 2020, the REINZ Dairy Farm Price Index increased 12.7%. 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 November 2021, the median sale price per hectare for finishing farms was $37,020 (104 properties), compared to $34,560 (71 properties) for the three months ended October 2021, and $32,270 (149 properties) for the three months ended November 2020. The median price per hectare for finishing farms has increased 14.7% over the past 12 months. The median finishing farm size for the three months ended November 2021 was 39 hectares.

Grazing farms For the three months ended November 2021, the median sales price per hectare for grazing farms was $13,330 (79 properties), compared to $11,810 (57 properties) for the three months ended October 2021 and $10,390 (115 properties) for the three months ended November 2020. The median price per hectare for grazing farms has increased 28.3% over the past 12 months. The median grazing farm size for the three months ended November 2021 was 123 hectares.

Horticulture farms

For the three months ended November 2021, the median sales price per hectare for horticulture farms was $241,625 (56 properties), compared to $313,970 (45 properties) for the three months ended October 2021 and $315,140 (56 properties) for the three months ended November 2020. The median price per hectare for horticulture farms has decreased 23.3% over the past 12 months. The median horticulture farm size for the three months ended November 2021 was eight hectares.

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