Year ‘looks promising’ for dairy farm sales
Agents are noticing a resurgence in dairy farm sales, writes Andrea Fox.
Waikato dairy farm sales brokers are anticipating a livelier year, with the market getting up a head of steam in the leadup to Christmas and a broader range of buyers emerging again after the economic slump.
PGG Wrightson Waikato-King Country real estate manager John Sisley said the market was the busiest he had seen in more than three years. The greater Waikato region – Pukekohe to Reporoa – notched up 86 dairy farm sales last year, compared with 49 in 2011, Mr Sisley said. Sales in November and December totalled $103 million, he said.
Bayleys Country said it had done $79m of dairy farm deals in Waikato and the Bay of Plenty in the five weeks to Christmas. This did not include the $200m sale of the central North Island Crafar dairy farms estate, after a nearly three-year receivership.
Simon Anderson, manager of Bayleys Country Waikato-Bay of Plenty- Taranaki, predicts 2013 sales will outstrip last year’s total, with prices holding steady.
Mr Anderson said early spring and autumn were no longer the main times for dairy farm deals, with transactions taking place year-round. Mr Sisley said though there had been a considerable lift in market activity, farm prices were still flat.
The average price in Waikato last year was $39,976 per hectare, compared with $ 36,000/ ha in 2011. In boom year 2007 the average price was $50,000/ha and in 2006, about $ 44,000. Between 1996 and 2006, annual dairy farm sales in the region averaged 107, Mr Sisley said.
‘‘So at 86 [last year] we are still behind overall.’’ He said the fresh energy in the market was fuelled by cheap interest rates, and after four years of market impact from the economic downturn, ‘‘people are getting used to the new reality’’.
There had been several buyer inquiries from Canterbury, where farm prices were now edging closer to Waikato levels, he said.
Another feature of the early market this year was fewer listings than New Year 2012.
Bayleys Waikato Country sales manager Mark Dawe said the market was looking ‘‘quite promising’’ this year and the lift in sales helped buyers and sellers understand the market.
‘‘Each season buyers and sellers want comfort that their opinions on prices are in the same ballpark as others, though of course every farm has a different value.’’
Mr Dawe said the market was no longer characterised by a narrow base, with larger farm operators and multiple farm owners emerging again.
Mr Anderson said a ‘‘real variance’’ was developing between the prices fetched by central Waikato and Bay of Plenty dairy farms and those on the fringes of the region.
Demand had returned with confidence, he said.