Rural market ‘back to business’

Manawatu¯’s rural property market has spurred back into action after the hit it took over the past few months.

As expected, April 2020 sales volumes plunged across the country during Covid-19 lockdown, with the latest data released by Real Estate Institute of New Zealand (REINZ) showing a 30.7 per cent drop in farm sales for the three months ended April 2020 comparedwith 2019.

But Feilding-based Rural and Lifestyle Sales principal Richard Anderson says it’s back to business already in the Manawatu¯.

‘‘Yes Covid-19 did stop us from moving properties, but we are certainly back into it nowwith a lot of strong interest in properties already.’’

Vendors still want to move properties on before winter sets in and buyers are already hunting for good grazing, finishing and arable blocks in the region.

‘‘As an example, just last week a new 100 hectare property was bought to the market and by early thisweek there were offers on the table.’’

Real estate was affected by closed offices and buyers unable to view properties during lockdown in what is traditionally the strongest sales period for farms: March to May.

Farm enterprises were able to continue their normal day-to-day operations as essential business, but drought conditions piled pressure on.

With closed stock sale yards and meat works reducing their production levels to meet lockdown regulations, problems compounded. Having to hold on to stock with no grass in the paddocks, farmers have relied on winter feed to get them through.

‘‘There’s a lot of farmers going into the winter with a feed deficit right now and that unfortunately is going to impact right through the year.’’

While farming has its fair share of challenges, Anderson is optimistic and confident, ‘‘We’ve got a lot of positives to work on, now everything is up and running again, and everyone is doing all they can to get things moving.

‘‘A reduced exchange rate, good livestock prices, interest rates at historic lows, and banks have money to lend.

‘‘While bankers are being cautious, they have money to lend if they are presented with an opportunity that will bank well, and for anyone wanting to expand business that has a strong financial balance sheet,’’ says Anderson.

Those with loans have benefitted from reducing interest rates and have been able to renegotiate their terms.

‘‘We’ve had some rain while ground temperatures are still good, so grass is going to grow. Aswemove into winter, it’s just amatter of making the most of what we’ve got and getting on with it.’’

The demand for lifestyle blocks continues as it was pre-lockdown; sales have been very good. The market has adjusted to low stock levelswith property continuing to turn over relatively quickly; that appears to be the way things are proceeding now.

Nationwide 1167 farms sold in the year to April 2020, 19.0 per cent fewer than in the year to April 2019, with 28.8 per cent fewer dairy farms, 19.9 per cent fewer grazing farms, 29.6 per cent fewer finishing farms and 17.2 per cent fewer arable farms sold over the same period.

The number of sales for April 2020 was just 197, compared to 542 for April 2019 and 644 for April 2018.

Themedian price per hectare for all farms sold in the three months to April 2020was $22,660 compared to $22,624 for threemonths ended April 2019, butwas up by 7.2 per cent compared to March 2020.