Busy spring for farm sales looking likely
In a typical year, activity in the rural property market will ease off through winter.
While that means there are few recent transactions to report, all indications suggest a busy spring selling season ahead.
Those likely to buy or sell dairy farms in September or October are now entering the early stages of that process.
Vendors want to expand, or in some cases to retire from farming.
A number of smaller 70 to 90 hectare dairy farms will come on the market between Tokoroa and Matamata, as their owners look to take the next step to a larger property.
There is no indication that local farmers are under financial pressure to sell.
Meanwhile, we are hearing from farmers who want to purchase land to increase the size of their operation in the coming season.
If something comes up that suits their situation, they will move relatively quickly.
In the past few months the reduced payout and dairy’s uncertainty has fed a perception gap between vendors and purchasers about property values.
While sellers held out for values similar to when returns were higher, purchasers maintained that reduced profitability meant those prices are no longer justified.
As a 10 to 15 per cent perception gap was established, deals became difficult to complete.
However, a better match between vendor and purchaser price expectations is now emerging.
Vendors and purchasers are beginning to understand value in the present situation, becoming more realistic and meeting in the middle.
When the interests of buyers and sellers coincide, deals will be done, which with willing buyers, motivated sellers and consensus on values, now looks likely to occur reasonably frequently this spring.
Meanwhile, my PGG Wrightson Real Estate colleagues who specialise in lifestyle property report that their sector is going especially well.
While this is the case throughout most of the country, we are particularly benefiting here.
New listings are coming to the market and selling quickly.
Compared to neighbouring districts, South Waikato lifestyle blocks are undervalued.
Here it is possible to purchase more land with a better quality house and still have money to spare.
People recognising that are choosing to re-locate their homebased businesses here, knowing that if they do need to travel, they are within easy reach of many important destinations.
Sales volumes, and values, of lifestyle properties are rising accordingly.
Richard Leach sells rural property for PGG Wrightson Real Estate. Based in Putaruru, he operates from Matamata through the Central Plateau to Taupo. Bringing a strong farming and sales background to the rural property sector, he was recognised as the company’s nationwide ‘Rookie of the Year’ for rural property sales in 2014/15.