Rural property market beginning to move
In any given season, there will always be a proportion of farmers ready to retire.
Over the past two years, that number has dropped. As dairy returns have ebbed back through the lower part of their cycle, farmers who would otherwise sell property and exit the industry have held on, waiting for better times and increased property values.
Recent positive movement in the Global Dairy Trade auction is now motivating a number of these farmers to reactivate their retire- ment plans and enter the property market.
That means over the next few weeks the number of properties listed for sale will pick up.
Meanwhile, some encouraging local transactions have occurred, with good quality dairy farms around Matamata, Putaruru, Te Awamutu and Hamilton selling at values between $40,000 and the mid $70,000s per hectare.
Pricing depends on the specifications, contour and location of the properties concerned. Buyers are generally local established farmers, with equity, who are increasing their holdings.
Although there is also enquiry from sharemilkers wanting to step up to farm ownership, the eventual purchases are being made by those who already own land and are increasing the scale of their operations.
To this activity, add in a couple of impending local auctions.
A 79 hectare Arapuni drystock property with potential for use as dairy support goes to auction on November 24, while a 58 hectare Putaruru dairy farm goes under the hammer on December 15.
Auctions give us a definite public gauge of market confidence, which those who are thinking about selling will react to. These two auctions may persuade more of those who have sat back that the time to move on has arrived.
So long as they are realistic, these vendors can expect a positive response from the market in the new year, particularly good quality property.
We may well have a particularly busy summer in the local rural property market. If so, those who act swiftly and decisively will reap the greatest rewards.
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 top marketing salesperson nationwide in 2015/16. for