Dairy farm sales re­vive ru­ral mar­ket

Matamata Chronicle - - Property -

A rush of dairy prop­erty trans­ac­tions in De­cem­ber helped lift the me­dian farm sale price but lo­cal agents said farm val­ues were still sit­ting around 2005 lev­els. Real Es­tate In­sti­tute of New Zealand ru­ral mar­ket statis­tics re­vealed 30 farms were sold na­tion­wide in De­cem­ber, bring­ing a huge boost for the ru­ral sec­tor but most in the in­dus­try be­lieved be­tween 20 to 30 per cent has been wiped off farm val­ues in the past two years.

PGG Wright­sons real es­tate man­ager Stu­art Cooper said buy­ers and sell­ers were still try­ing to work out where val­ues sat. He be­lieved prices had come back to 2005 lev­els but he said there was not a lot on the mar­ket for buy­ers to choose from.

While big parcels like the Cra­far farms and the 29 Carter Holt Har­vey farms around Toko­roa were still up for grabs, they were well out of reach of most buy­ers and with lend­ing right down the only ac­tiv­ity was with eq­uity buy­ers.

‘‘ Those eq­uity-based buy­ers tend to take a lot longer to make a de­ci­sion. They do thor­ough due dili­gence. These guys have been through the crash and man­aged to re­tain their funds be­cause they’re pru­dent.’’ He be­lieved the av­er­age time to sell a farm used to sit at be­tween 80 and 90 days but it had dou­bled.

In­sti­tute fig­ures showed the me­dian farm price in the Waikato had dropped from $1,550,000 to $1,500,000, in the three months to De­cem­ber.

Auck­land, the Bay of Plenty, Hawke’s Bay and Gis­borne also ex­pe­ri­enced re­duc­tions.

South­land and Taranaki saw the largest in­creases, me­dian prices in South­land went from $ 916,594 to $ 3,422,125 and in Taranaki from $ 2,125,000 to $2,664,438 but these fig­ures were most likely af­fected by higher sales vol­umes.

Bay­leys Waikato Coun­try Sales team man­ager Mark Dawe said farm prices had come back by 20 to 30 per cent over the past two years but low sales vol­umes had meant both buy­ers and sell­ers were un­sure where their prop­er­ties were placed in the mar­ket. The re­cent flurry of ac­tiv­ity be­fore Christ­mas had helped so­lid­ify the sit­u­a­tion, he said.

‘‘I think soon you’ll start to see a lot more farms be­ing ad­ver­tised, there’s not a huge amount of ac­tiv­ity at this stage.’’

The fig­ures showed me­dian farm sales prices were up 15 per cent from $968,500 at the end of Novem­ber 2010, to $1,150,000 in De­cem­ber.

Real Es­tate In­sti­tute of New Zealand ru­ral mar­ket spokesman Peter McDon­ald said there was still a huge vari­ance in the price per hectare be­ing paid for farms, how­ever.

The high­est price paid was $18.2 mil­lion and the av­er­age size of the dairy farms sold in De­cem­ber was 146ha, with an av­er­age milk­solid pro­duc­tion of 982kg per hectare.

In the last three months of 2010 there were 213 farm sales, an in­crease on the 170 sold in the three months to the end of Novem­ber.

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