Sales volumes heavily impacted by lockdown
TOUGH times throughout the eastern portion of the North Island in the April quarter, with drought conditions in many places, caused real grief and meant no sales of pastoral properties recorded, according to data from the Real Estate Institute of New Zealand (REINZ).
There were 111 fewer farm sales (down 30.7 percent) across the country for the three months ended April 2020, than for the three months ended April 2019. Overall, there were 251 farm sales in New Zealand in the latest period, compared to 281 farm sales for the three months ended March 2020 (down 10.7 percent), and 362 farm sales for the three months ended April 2019.
The median price per hectare for all farms sold in the three months to April 2020 was $22,660 compared to $22,624 recorded for three months ended April 2019. The median price per hectare increased 7.2 percent compared to March 2020.
The REINZ All Farm Price Index rose 0.2 percent in the three months to April 2020 compared to the three months to March 2020. Compared to the three months ending April 2019 the REINZ All Farm Price Index fell 8.8 percent.
Only two of the 14 regions recorded an increase in the number of farm sales for the three months, namely Otago (+3) and West Coast (+2). Bay of Plenty recorded the most substantial decline in sales (-23) followed by Taranaki (-16).
Brian Peacocke, Rural Spokesman, at REINZ said just as March 2020 will be remembered for the start of the Covid-19 constraints, April 2020 will be remembered as the month when, throughout most of New Zealand, sales volumes plunged, particularly when compared to the same period in 2018.
“The reductions from 2018 to 2020 for the period are dairy (-47 percent); finishing (-45 percent); grazing (-38 percent); arable (-24 percent); horticulture (-42 percent)
“The 3-month figures referred to camouflage the direct impact for the month of April alone compared to April 2018,” he said.
“In other respects, the lockdown has had less impact on the farming community in that being an essential industry, day-to-day activities have continued as opposed to workplaces which were deemed to be non-essential, being shut down throughout the rest of the country.
“Export prices have reflected the mix of market access restrictions and drought-induced access to meat processing facilities, the latter being exacerbated by Level 4 constraints which required separation between members of the workforce, which in turn reduced throughput by up to 50 percent,” Mr Peacocke said.
“The future wellbeing of the rural sector will now be even more influenced by climatic factors which have exposed the vulnerability of the sector, albeit the reduction in interest rates and the reduced exchange rate will be of benefit.”
He said one of the key determining factors for the future, however, will be the response from the trading banks regarding supplying sufficient capital for the requirements of the primary industries.