Year ‘looks promis­ing’ for dairy farm sales

Agents are notic­ing a resur­gence in dairy farm sales, writes An­drea Fox.

Matamata Chronicle - - Rural Delivery -

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.

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