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Consistent demand for quality properties - REINZ

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Fuseworks Media
Fuseworks Media

Data released today by the Real Estate Institute of New Zealand (REINZ) shows there were54 fewer farm sales (-11.1%) for the three months ended April 2022 than for the three months ended April 2021. Overall, there were 432 farm sales in the three months ended April 2022, compared to 396 farm sales for the three months ended March 2022 (+9.1%) and 486 farm sales for the three months ended April 2021. 

1,724 farms were sold in the year to April 2022, 34 fewer than were sold in the year to April 2021, with 16.4% more Dairy farms, 33.6% fewer Dairy Support, 7.8% fewer Grazing farms, 0.6% fewer Finishing farms and 6.2% fewer Arable farms sold over the same period.

The median price per hectare for all farms sold in the three months to April 2022 was $28,630 compared to $28,710 recorded for the three months ended April 2021 (-0.3%). The median price per hectare decreased 4% compared to March 2022.

The REINZ All Farm Price Index decreased 1% in the three months to April 2022 compared to the three months to March 2022. Compared to the three months ending April 2021, the REINZ All Farm Price Index increased 32.7%. 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.

Three regions recorded an increase in the number of farm sales for the three months ended April 2022 compared to the three months ended April 2021, with the most notable being Southland (+21 sales) and West Coast and Canterbury (+3 sales). Waikato (-34 sales) and Auckland (-14 sales) recorded the biggest decreases in sales. Compared to the three months ended March 2022, nine regions recorded an increase in sales, the most notable being Northland (+14 sales) and Manawatu-Whanganui (+9 sales).

Brian Peacocke, Rural Spokesman at REINZ, says: "Sales data for the three-month period ending April 2022 reflect an easing in numbers from the equivalent period 12 months ago, but an increase in sales from the three-month period ending March 2022.

"Of particular note is the solid increase in sales of finishing properties, as has been the case for grazing properties, whilst predictably, due to the time of the year, dairy farm sales have eased.

"From a national perspective, supply chain issues, and in particular the delays in the offloading of export produce at overseas ports, have continued to frustrate the rural sector.

"In addition, the mix of such issues combined with seasonal and climatic pressure on processing facilities is impacting negatively on product prices, notably the easing in the schedule for beef, followed by the recent drop in the global dairy trade price for dairy products.

"Of most concern, however, is the extended dry period and lack of rain in some of the key pastoral regions across the country, such as the Waikato and Southland, where feed supplies and a shortage of grass are early indications of a potentially difficult forthcoming winter.

"A variety of issues, including the increase in the official cash rate with the subsequent lift in interest rates, are giving rise to caution, this being indicative of the raft of cost increases, particularly fuel, that are impacting negatively on the rural sector, as of course is the case with other sectors.

"Despite the above, the demand for good quality finishing and arable properties exceeds supply," he concludes.

Points of Interest around the country include the following:

Northland/Auckland

A stellar run of sales of grazing, finishing and dairy properties has been a feature in Northland during April with activity being well spread across the Far North, Kaipara and Whangarei districts. By contrast, the Auckland district has been notable for not having had any farm sales for the month.

Waikato/King Country/Taupo

A significant drop in dairy farm sales, 3 for April and 10 for March, but well spread sales of finishing properties at strong prices throughout the Hauraki, Matamata, Waikato and Waipa districts; light activity in the Northern King Country but nil results in the South Waikato and Taupo districts.

Bay of Plenty/Rotorua

An easing of horticulture sales in the Western Bay of Plenty, zero farm sale activity in the Rotorua district but several sales of forestry blocks in the eastern regions of Whakatane and Opotiki.

Gisborne/Hawke’s Bay

Light activity on grazing units in Gisborne; equally light activity in the horticulture and grazing sectors of Hawke’s Bay, but two noteworthy sales of arable properties in the Wairoa district where very strong prices were paid.

Taranaki

A strong run of sales of finishing properties at consistently solid prices throughout the province, with the absence of any dairy farm sales being of note.

Manawatu/Whanganui/Tararua

Consistently strong sales of finishing and grazing units, well spread across Ruapehu, Rangitikei and Manawatu, but again the lion's share of the results and the plaudits go to Tararua, where two dairy farm sales topped off a very good performance for the month.

Wairarapa/Wellington

A moderate level of sales of grazing properties in central Wairarapa, supported by sales of a finishing unit and a dairy support block in the southern part of the district; no farm sales in the Wellington region.

Nelson/Tasman/Marlborough

Light activity on dry stock properties on the Marlborough district, but a better run of sales of finishing units in the Tasman district.

Canterbury/West Coast

Constrained activity in the northern sector; solid sales at very good prices for dairy support and arable units in the Ashburton district; the MacKenzie and Selwyn districts get mentioned, just, but better results on dairy, dairy support, finishing and grazing properties in the Waimakariri, Timaru, and Waimate locations. West Coast rested on their laurels after a strong performance last month, with light activity on the dairy and deer farming fronts.

Otago

A strong lift in sales of finishing properties, particularly in the Waitaki district; Central Otago performed creditably on grazing units, with Clutha registering activity on dairy, finishing and grazing properties.

Southland

Not as strong as last month but a good solid performance across the Southland and Gore districts, with line honours going to the Southland team due to the cross-section of sales at steady prices in the dairy, dairy support, finishing and grazing categories.

N.B.

It is of note that for the month of April, Northland, Manawatu/Tararua and Southland led the sales performance throughout the country, followed closely by Southland then Waikato, with finishing properties being the predominant category for sales activity.

In April 2022, Finishing farms accounted for a 31% share of all sales. Grazing farms accounted for 28% of all sales, Dairy farms accounted for 19% of all sales and Horticulture farms accounted for 9% of all sales. These four property types accounted for 86% of all sales during the three months ended April 2022.

Dairy Farms

For the three months ended April 2022, the median sales price per hectare for dairy farms was $37,060 (81 properties), compared to $37,890 (90 properties) for the three months ended March 2022, and $32,170 (117 properties) for the three months ended April 2021. The median price per hectare for dairy farms has increased 15.2% over the past 12 months. The median dairy farm size for the three months ended April 2022 was 128 hectares.

On a price per kilo of milk solids basis, the median sales price was $32.63 per kg of milk solids for the three months ended April 2022, compared to $35.27 per kg of milk solids for the three months ended March 2022 (-7.5%), and $34.45 per kg of milk solids for the three months ended April 2021 (-5.3%).

The REINZ Dairy Farm Price Index increased 4.7% in the three months to April 2022 compared to the three months to March 2022. Compared to April 2021, the REINZ Dairy Farm Price Index increased 10.7%. 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 April 2022, the median sale price per hectare for finishing farms was $35,415 (134 properties), compared to $33,230 (117 properties) for the three months ended March 2022, and $36,040 (124 properties) for the three months ended April 2021. The median price per hectare for finishing farms has decreased 1.7% over the past 12 months. The median finishing farm size for the three months ended April 2022 was 40 hectares.

Grazing Farms 

For the three months ended April 2022, the median sales price per hectare for grazing farms was $13,820 (121 properties), compared to $13,835 (104 properties) for the three months ended March 2022 and $11,015 (126 properties) for the three months ended April 2021. The median price per hectare for grazing farms has increased 25.5% over the past 12 months. The median grazing farm size for the three months ended April 2022 was 174 hectares.

Horticulture Farms

For the three months ended April 2022, the median sales price per hectare for horticulture farms was $697,820 (37 properties), compared to $688,330 (36 properties) for the three months ended March 2022 and $440,630 (49 properties) for the three months ended April 2021. The median price per hectare for horticulture farms has increased 58.4% over the past 12 months. The median horticulture farm size for the three months ended April 2022 was 5 hectares.

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