The latest figures released today by the Real Estate Institute of New Zealand (REINZ) show the total number of farms sold in the three months to December 2009 was 241. This compares with 346 and 753 farms sold in the three month periods to December 2008 and December 2007 respectively.
In a three-year comparison, the value of farm prices has dropped in the three months to December 2009 to a national median of $1,000,000 from $1,650,000 and $1,525,000 in the corresponding periods for 2007 and 2008 respectively.
‘There is still a strong interest and confidence from buyers and there are some very good listings up for sale. But the tightening up of the rural finance sector due to the economic climate has impacted the ability of the young farmer to graduate to farm ownership in the traditional way – by purchasing a farm and then building on their investment’ said REINZ National President, Peter McDonald.
‘This situation has also impacted those farmers who are ready to retire as there are fewer purchasers in the market who are able to complete the transaction. At this stage there seems to be no indication that this situation will rectify itself and there is concern that financial policies in this sector may continue to tighten.’
The greatest number of farm sales during the three months to December was recorded in Canterbury with 30 sales, followed closely by Waikato with 28 sales recorded.
Grazing accounted for the largest number of farms by type, with 113 sales recorded throughout the country in the three months to December 2009.
‘December is normally a peak time for dairy farm sales. But there were only 30 dairy farms sold in the three months to December, down from the 43 sold in the corresponding three months to December 2008. The average price per hectare for the dairy farms sold in the December was $29,754. The average size of the dairy farms sold was 182ha, with an average of $35/kg of milksolids. The average milk solid production for these farms was 861kg/ha.
‘The drop in the median price is a reflection of the lack of dairy farms sold during this period. The majority of sales are grazing blocks and not dairy farms’ Mr McDonald says.
Lifestyle properties have continued to perform strongly, representing good investment value, with turnover and prices holding reasonably firm on the previous month.
The national median selling price for a lifestyle property in the three months to December 2009 was $464,000, up $9,000 on the three months to November 2009 at $455,000. This compares with $455,000 and $450,000 in the same periods in 2007 and 2008 respectively.
Prices were highest in Nelson at $550,000, with the most modest median for lifestyle properties to be found on the West Coast ($225,000). Seven districts experienced an increase in the median selling price for a lifestyle property, while six districts recorded decreases.
A total of 1,359 lifestyle properties were sold in the three months to December 2009 compared with 1,413 in the three months to November 2009; well up on the 959 sold in the three months to December 2008 but down on the 1,793 sold in the three months to December 2007.