Busy spring for farm sales look­ing likely

Matamata Chronicle - - Your Paper, Your Place - RICHARD LEACH

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.

Richard Leach

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