The rural real estate market is moving into a busy period with sales figures recorded in October giving an early indication of a market that is still establishing itself according to the Real Estate Institute of New Zealand (REINZ).
Commenting on the October figures released today, REINZ National Councillor and rural spokesperson Peter McDonald said the signs point to a similar market as last year and in some cases, particularly dairy, even stronger.
“There have been plenty of enquiries for good properties. The only limiting factor is the availability of finance.”
Mr McDonald said that while farmers had no problems with budgets, a shortage of borrowing funds was having an impact on certain kinds of sales.
“We’re seeing a lot more offers made conditional on finance and that’s not possible in an auction situation where funds need to be immediately available.”
Nevertheless, the median sale price for farms in the three months to October New Zealand-wide was $1,500,000 compared with $1,305,000 in August - October 2007 and $930,000 in the corresponding period in 2006. Turnover was down however, with the number of farms sold in the three months to October 2008 down to 390 compared with 582 in the same period in 2007 and 470 in 2006.
In the month of October, the average price per hectare for dairy farms was $42,057 compared with $34,900 in September. This is also well up on the $36,246 average price per hectare for dairy farms in October 2007 and $34,188 in October 2006. Fifteen dairy farms were sold in October compared with 13 in September and 25 in October 2007.
The average price for milk solids dairy farms in October was $62.
In other farming categories, finishing farms remained steady with 14 sales at an average price per hectare of $18,190 in October compared with 11 sales for an average price of $18,352 per hectare in September.
The lifestyle property market continues to hold well and has been reasonably active, Mr McDonald said.
“Lifestyle farm sales are maintaining their hold where they have been for the last three or four months both in numbers of sales and median values.”
In the three months to October, there were 1054 lifestyle blocks sold with a median sale price of $425,278. This compares with 1071 sales at a median price of $435,000 in the three months to September 2008.