March rural data: Slow and steady, as farmers wait for the economy

4 May 2023

Data released today by the Real Estate Institute of New Zealand (REINZ) shows there were -182 less farm sales (-44.2%) for the three months ended March 2023 than for the three months ended March 2022.

Add a general statement Overall, there were 230 farm sales in the three months ended March 2023, compared to 311 farm sales for the three months ended February 2023 (-26%), and 412 farm sales for the three months ended March 2022.

1,315 farms were sold in the year to March 2023, -502 less than were sold in the year to March 2022, with 31.6% fewer Dairy farms, 16.5% fewer Dairy Support, 18.1% fewer Grazing farms, 23.8% fewer Finishing farms and 37.3% less Arable farms sold over the same period.

The median price per hectare for all farms sold in the three months to March 2023 was $28,520 compared to $30,040 recorded for three months ended March 2022 (-5.1%). The median price per hectare decreased 7.1% compared to February 2023.

The REINZ All Farm Price Index decreased 1.7% in the three months to March 2023 compared to the three months to February 2023. Compared to the three months ending March 2022 the REINZ All Farm Price Index decreased 8.6%. 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.

No regions recorded an increase in the number of farm sales for the three months ended March 2023 compared to the three months ended March 2022, with the smallest decreases being Wellington ( -1 sales) and Auckland ( -4 sales). Taranaki ( -25 sales) and Southland ( -24 sales) recorded the biggest decreases in sales. Compared to the three months ended February 2023, one region recorded an increase in sales; Northland (+5 sales).

In March 2023, Grazing farms accounted for a 32% share of all sales. Finishing farms accounted for 24% of all sales, Dairy farms accounted for 20% of all sales and Dairy Support farms accounted for 8% of all sales. These four property types accounted for 84% of all sales during the three months ended March 2023.

Dairy Farms

For the three months ended March 2023, the median sales price per hectare for dairy farms was $39,620 (46 properties), compared to $44,000 (71 properties) for the three months ended February 2023, and $37,890 (94 properties) for the three months ended March 2022. 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 March 2023 was 138 hectares.

On a price per kilo of milk solids basis, the median sales price was $37.13 per kg of milk solids for the three months ended March 2023, compared to $38.05 per kg of milk solids for the three months ended February 2023 (-2.4%), and $35.27 per kg of milk solids for the three months ended March 2022 (+5.3%).

The REINZ Dairy Farm Price Index decreased 2% in the three months to March 2023 compared to the three months to February 2023. Compared to March 2022, the REINZ Dairy Farm Price Index increased by 10.5%. The REINZ Dairy Farm Price Index adjusts for differences in farm size and location compared to the median price per hectare, which does not adjust for these factors.

Finishing Farms

For the three months ended March 2023, the median sale price per hectare for finishing farms was $37,375 (56 properties), compared to $39,365 (74 properties) for the three months ended February 2023, and $33,230 (119 properties) for the three months ended March 2022. The median price per hectare for finishing farms has increased 12.5% over the past 12 months. The median finishing farm size for the three months ended March 2023 was 37 hectares.

Grazing Farms

For the three months ended March 2023, the median sales price per hectare for grazing farms was $12,350 (73 properties), compared to $12,940 (102 properties) for the three months ended February 2023 and $13,835 (106 properties) for the three months ended March 2022. The median price per hectare for grazing farms has decreased -10.7% over the past 12 months. The median grazing farm size for the three months ended March 2023 was 170 hectares.

Horticulture Farms

For the three months ended March 2023, the median sales price per hectare for horticulture farms was $367,340 (9 properties), compared to $375,140 (13 properties) for the three months ended February 2023 and $552,090 (40 properties) for the three months ended March 2022. The median price per hectare for horticulture farms has decreased -33.5% over the past 12 months. The median horticulture farm size for the three months ended March 2023 was 5 hectares.

Real Estate Institute of New Zealand

For more real estate information and market trends data, visit www.reinz.co.nz. For New Zealand's most comprehensive range of listings for residential, lifestyle, rural, commercial, investment and rental properties, visit www.realestate.co.nz - REINZ's official property directory website.

Notes to Editors:

The information provided by REINZ in relation to the rural real estate market covers the most recently completed three-month period; thus, references to February 2023 refer to the period from 1 December 2022 to 28 February 2023.

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 [email protected].