Strong buying demand but low volumes of sales boosted grazing, dairying and horticultural property prices during August, according to the latest rural sales figures from the Real Estate Institute of New Zealand.
The median selling price for rural properties for August 2005 was up significantly to $807,500, when compared with the $730,000 median recorded for July.
In a traditionally quiet month, where sales reach a relative low-point, just 170 rural properties changed hands in August, down on the 181 sold in July and below the 175 sales for August 2004.
But demand for dairying and grazing properties in the last two years has completely exceeded supply with strong price rises, according to Real Estate Institute Vice President, Mr Murray Cleland.
“Dairying prices have nearly doubled since early 2003 and grazing properties are not far behind.”
The latest dairying median selling price for August is $2,720,000, compared with $2,176,748 in July and the median of $2,305,000 in August 2004.
Mr Cleland said that earlier in 2003 dairy prices were selling at a median of between $1,500,000 to $1,700,000, although individual monthly figures varied, suggesting prices are now close to double that of two years ago.
In the grazing sector the pattern was the same, according to Mr Cleland, with the latest median for August up to $677,722 compared with $660,000 in July and $650,000 in August 2004.
“In early 2003 grazing property prices were tracking at between $500,000 to $570,000.”
Mr Cleland said that demand, assisted by consistent farm returns over recent years and a degree of investor interest from the cities, had consistently exceeded supply of good quality properties with the result that people were prepared to pay more.
The horticultural property median was up from $676,250 in July to $868,500, compared with the August 2004 median of $622,500, although the 22 sales in August 2005 were beneath the 30 recorded in July 2005 and August 2004.
In the lifestyle property sector, prices jumped around markedly with the national median down from $352,000 in July to $335,000, due mainly to some big fluctuations on low volumes in the provinces.
The Auckland lifestyle median was up from $582,500 in July to $590,000, the Waikato median was down slightly from $360,000 in July to $359,500 in August, while Bay of Plenty slipped from $360,000 in July to $345,000.
The Hawkes Bay median, up steeply in July to $467,500, came back to $354,250 while the Taranaki lifestyle median was down from $350,000 in July to $280,000, but on just 17 sales.
Total lifestyle block sales were up from 635 in July to 665 in August.
Download the full press release: reinz-rural-report-august-2005.doc