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Farm sales quiet but lifestyle strong

THE farm sale scene in Tairawhiti was “relatively subdued” in the three months to the end of December, but lifestyle block sales in the region were up 26 percent and they sold faster than everywhere else.

Data released by the Real Estate Institute of New Zealand (REINZ) shows 95 fewer farm sales around the country in the December quarter compared to the same period in 2018.

A total 345 farm sales were recorded nation-wide in the period, and 1266 farms were sold in the year, 15.8 percent fewer than were sold in the year to December 2018.

The median price per hectare for all farms sold in the three months to December 2019 was $38,152. This compared to $40,589 which was recorded for three months ending December 2018.

The REINZ All Farm Price Index fell 0.3 percent in the three months to December 2019, compared to the three months to November 2019.

Brian Peacocke, Rural Spokesman at REINZ said, while sales volumes for the December quarter were down significantly on the equivalent period 12 months ago, there was nevertheless a distinct improvement on the previous three month period ending November 2019.

“Of particular significance was the lift in dairy farm sales in the Waikato, from 2 per month for October and November to 11 for December 2019.

“Modest gains were also recorded in the finishing and horticulture sectors, with a strong lift in volume in the grazing sector during the month of December,” he said.

“Product prices remained strong leading into the Christmas/New Year holiday period, with increasingly optimistic forecasts emerging for the milk payout in the dairy sector.

“There is little evidence of change in the market-suppressing stance from the majority of the trading banks, where it would appear one bank in particular is enjoying the benefit of leaving the shop door open,” Mr Peacocke said

“Whilst rural morale is generally good, a mood of caution exists relating to the forthcoming summer dry period, and huge sympathy is evident as New Zealand farmers empathise with their fire-ravaged Australian counterparts.”

He said the farm sales scene in Gisborne/Hawke's Bay was relatively subdued.

“There was light activity in the grazing sector in Gisborne, while Hawke's Bay maintained par with modest volumes albeit steady prices in the finishing and grazing sectors.”

Grazing farms accounted for the largest number of sales (34 percent) across the December quarter.

When it comes to lifestsyle blocks there were 116 more lifestyle property sales across the country in the latest quarter.

Overall, there were 1922 lifestyle property sales compared to 1775 for the three months ended December 2018.

The median price for all lifestyle properties sold in the three months to December 2019 was $725,000 and was $35,000 higher compared to the three months ended December 2018 (an increase of 5.1 percent).

Mr Peacocke said sales volumes recorded in the sector were encouraging and reflect solid strength in the marketplace.

“While volumes eased in the month of December compared to November, that easing can be reasonably attributed to the shorter selling period leading into Christmas.

“The median price of $725,000 for the country which is the highest for some time, underpins the strength of the market.”

Gisborne was one of nine regions to record an increase in sales compared to the December quarter the previous year.

Five lifestyle blocks sold in Tairawhiti in the month of December, 10 in November and five in October.

“There's a trend nationally whereby the lifestyle market is strengthening, driven in part by a shortage of supply.” he said.

“Seven regions saw the median price of lifestyle blocks increase and the most notable examples were Gisborne (26 percent), Southland (15 percent) and Wellington (13 percent).

“The median number of days to sell for lifestyle properties was two days longer in the period and Gisborne recorded the shortest number of days to sell in December 2019 at 39 days.”