Farm sale num­bers fi­nally mov­ing up­ward

Matamata Chronicle - - News -

An­nual farm sales have topped 1600 for the first time in more than 41⁄ years, though the $24,590 me­dian hectare price re­mains sig­nif­i­cantly be­low its peak.

Real Es­tate In­sti­tute of New Zealand fig­ures showed 93 more farms sold in the three months ended Oc­to­ber this year than in the same pe­riod in 2012.

The 349 farms sold was an in­crease of 36.3 per cent on a year ago, of which graz­ing prop­er­ties ac­counted for about half of all farms sold.

For the year ended Oc­to­ber, 1629 farms were sold, the first time an­nual sales have sur­passed 1600 since April, 2009.

REINZ ru­ral spokesman Brian Pea­cocke said the New Zealand mar­ket was still vari­able, rang­ing from ac­tive and strong to patchy and quirky.

Bay of Plenty had the largest in­crease in farm sales, with 24 more sold, while Nel­son recorded the largest fall, drop­ping 19.

‘‘Early spring sales re­flect a healthy trend but it will be Novem­ber be­fore sig­nif­i­cant sales ev­i­dence emerges.’’

The me­dian hectare price in the Oc­to­ber quar­ter was $24,950, up from $19,872 for the same pe­riod a year ago.

A Taranaki dairy farm had sold for $74,000 a hectare, while a ki­wifruit or­chard in Te Puke fetched be­tween $230,000 and $260,000 a canopy hectare.

The REINZ ad­justed price in­dex fell from Septem­ber to Oc­to­ber, how­ever, drop­ping 4.1 per cent.

This in­dex ad­justed pric­ing for dif­fer­ences in farm sizes, lo­ca­tion and farm­ing type.

Pea­cocke said good prop­er­ties were sell­ing well but there was a hint of buyer re­sis­tance emerg­ing be­cause of higher price ex­pec­ta­tions from ven­dors.

‘‘Whilst cur­rent farm prices are im­prov­ing, it is of in­ter­est to note the lev­els are sig­nif­i­cantly be­low the peak of farm prices recorded mid-Oc­to­ber 2008.’’

The me­dian price for dairy farms fell slightly, though to­tal sales rep­re­sented 10.6 per cent of all farms sold for the three months ended Oc­to­ber.

Dairy farm­ers were warned last week they could be in for the same big-stick treat­ment from the Re­serve Bank gov­er­nor as home­buy­ers if they were not re­spon­si­ble about their debt lev­els.

Fed­er­ated Farm­ers pres­i­dent Bruce Wills said there was an in­creas­ingly stern tone from the Re­serve Bank about the dairy sec­tor’s high debt, and the eco­nomic risk it pre­sented if cur­rent pay­out prospects led to another bor­row­ing and spend­ing bo­nanza.

Farm­ers should re­mem­ber the Re­serve Bank gov­er­nor had a tool­box as he had proved by re­cently im­pos­ing bor­row­ing re­stric­tion speed lim­its or loan ra­tio val­ues (LVRs) on home­buy­ers, Wills said.

His warn­ing fol­lowed the Re­serve Bank high­light­ing dairy sec­tor debt in its lat­est Fi­nan­cial Sta­bil­ity Re­port say­ing loans by reg­is­tered banks to dairy farm­ers this year to­talled $32.37 bil­lion, agri­cul­ture on-farm loans were $49.2b and agri­cul­ture owed banks $50.5b.

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