A solid surge in dairy farm sales and prices underpinned the rural property market in November, according to the latest rural property market report from the Real Estate Institute of New Zealand (Inc).
In what is proving to be a customarily busy month for rural real estate agents, November saw total farm sales up from 169 in October to 241 in November, also up on the November 2005 figure of 236 and the November 2004 figure of 223 sales.
Dairy farm sales were strong, up from 21 in October 2006 to 46 in November 2006, though still below the November 2005 figure of 54 sales.
The dairy median price was up from $2,330,000 in October to $2,487,500 which was also well up on the November 2005 dairy median of $2,365,000.
Overall the national farm median price recovered from a somewhat subdued $900,000 in October, to $1,100,000 in November, though still below the November 2005 median of $1,142,500.
"Improving economic factors and growing confidence seem to have overcome the lull in farm confidence of previous months, resulting in improved sales numbers and stronger prices", according to REINZ National President Murray Cleland.
"Farming confidence is affected by many factors on the other side of the farm gate and especially this year by the strong dollar, but clearly there is still buying interest exceeding the number of properties available and that’s what’s driving prices up. Investment interest from non-farmers remains strong, reflecting a perception that farming is both a productive and a safe investment for those in the cities seeking diversification".
Other sectors to feature strongly during November were finishing properties with sales up from 22 in October to 43 in November and the median price up from $1,500,000 in October to $1,650,000 in November, and grazing properties with a median up from $712,500 in October to $792,500 on sales up from 88 in October to 100 in November.