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Demand for rural property holds up despite quiet market

22 Aug 2005

Despite a seasonally quiet month for the rural property market, demand remains strong and prices are holding up, according to the latest rural sales figures from the Real Estate Institute of New Zealand.

The median selling price for rural properties for July 2005 was $730,000, down on the $937,500 median recorded for June, largely as a result of seasonally low turnovers.

Real Estate Institute Vice President, Mr Murray Cleland, said very low farm sales volumes in July, which is traditionally a quiet month, were the reason for the apparent fall. Just 181 properties sold in July compared with 208 in June and 176 in July 2004.

Mr Cleland said that demand for rural properties was strong, it was supply that was the problem.

Lifestyle property prices, in the spotlight recently, also eased slightly from $355,000 in June to $352,000 in July.

However Mr Cleland said that when compared with the July 2004 median of $302,000, lifestyle property prices were up 16.5 per cent on a year ago, ahead of the national median residential property price for the same period which rose by 12.45 per cent.

“This supports the view that lifestyle properties are in strong demand from city dwellers, as we noted last month, and that prices are reflecting this.

“From an investment point of view you would have to say that lifestyle properties are outperforming suburban residential properties as a result of being more closely aligned with rural values.”

Among the various agricultural categories, the single largest sales group was grazing properties at 106 sales, well down on the 124 in June but slightly ahead of the 98 sales in July 2004.

The median price for a grazing property was down from $807,500 in June to $660,000 in July, but remained ahead of the July 2004 median of $657,500.

The dairying median was down from $2,500,000 in June to $2,176,748, but on just 12 sales compared with 16 in June and 15 in July 2004. Mr Cleland said demand for dairy properties continued to be strong and land values were holding up very well in this sector.

Finishing properties were also in demand with the median at $1,295,000 in July 2005, compared with $1,320,000 in June and $1,362,500 in July 2004.

Horticultural properties were similarly well sought after with the July median up from $632,000 in June to $676,250.

Dowload full press release:  reinz-rural-rpt-july-2005.pdf