The residential property market might have fallen into the doldrums but the price of dairy farms hit new records in January, according to REINZ National Councillor and rural spokesperson for the Institute Mr Peter McDonald.
The New Zealand dairy farm median price for the three month period to January 2008 leapt to a new record of $4,250,000, from $3,575,000 in the three months to December.
The rise had been predicted by the Institute in November, when it became clear that the milk solids payout for the current year was going to be considerably up on previous levels.
Nevertheless the latest record median price came as a pleasant surprise according to Mr McDonald.
“We’ve been saying for a while, ‘watch the flow on effect of record dairy payouts on dairy farm prices’ but the latest figures really promote dairy farmers into a new ‘Rich List’ category of their own in the farming community”, Mr McDonald said today.
The national median price for all farms increased from $1,650,000 to $1,790,000 on the back of the strong dairy trend, on 732 farm sales for the three months to January, compared with 753 sales for the three months to December 2007.
Being the peak transaction period for dairy farms, the three months to January saw 156 sales compared with 133 to December 2007 and 102 to January 2007.
“There has been a real surge in dairy farm sales on the back of the increased milk solids payouts, with both existing dairy farmers taking advantage of the increased incomes to expand into further or larger properties and city investors deciding now is the time to invest in dairying”.
Mr McDonald said that rising dairy farm prices saw the average price per hectare rising to over $37,000, with the price per kilo of milk solids rising to over $40 a kilo. The combined average price per Milk solids/Hectare was over $6,000.
The Institute was aware of three sales in the latest period, in the Otautau region in Southland, one of which involved a 247 hectare property sold for $12,275,000, while the other two were slightly smaller properties went for $9,600,000 and $9,900,000.
“That’s the sort of money the top end farms are going for so it’s not difficult to see why the median price is now up to $4,250,000” he said
Other farm category medians were also firm with Arable up from $1,762,126 to December to $1,950,000 to January 2008 and Finishing properties up from $2,175,000 to $2,350,000.
Grazing properties were in demand, up from $1,200,000 to $1,300,000 with 300 sales while the horticulture median was steady at $920,000 compared with $930,000 to December but on lower sales at 34 compared with 45 to December.
In the lifestyle property sector, unlike the residential market, values were firm with the median up from $455,000 to $460,000 on remarkably solid turnover of 1,701 sales for the three months to January, down only slightly on the December figure of 1,793.
The most expensive lifestyle blocks were to be had in Auckland region at a median of $793,000, followed by Hawkes Bay at $550,000 and Waikato at $499,000.