Buyers remain realistic in rural market
Two Waikato farms that sold late last year provided a snapshot into the rural property market.
A 79-hectare Putaruru drystock block sold at auction on November 24 for $2.4 million.
On December 23, a 57-hectare dairy farm, also in Putaruru, sold for $2.6m. Both properties have been purchased with a focus on dairy support: growing maize, hay and silage, running bulls and young stock.
While buyers looking to purchase land are evident, they tend to be cautious, contributing to a softening of values, particularly for those properties in less soughtafter locations.
As greater Waikato mainly comprises first-tier dairy farms however, local price reductions are less significant than in some other regions.
Although lower prices are a challenge, looking at the big picture, they will help create a stronger future. When times are tough, farmers have no option other than to become more efficient.
Capital gains are no longer the guaranteed motivation that previous generations took for
‘‘Capital gains are no longer the guaranteed motivation that previous generations took for granted.’’
Rather than sitting back and waiting for long-term property values to appreciate, farmers need to find ways to achieve cash surpluses.
While that may provide little consolation for those on the sharp end, in the long run, it will give us a more robust dairy industry.
Over the past few weeks, we have received calls from farmers looking to sell dairy property and cash up before the 2017/18 season. In general, these are people who have been thinking about retirement for a few years.
They are set on selling as fav- ourably as possible and have decided the time to act is now.
Their dairy properties should come to the market in reasonable numbers through the autumn.
Demand is such that those who are patient and keep their expectations realistic should be able to achieve their objectives over the next few months and set themselves up to exit the industry.
This 79-hectare drystock block, Putaruru, sold at auction for $2.4 million.
This 57-hectare dairy farm, in Putaruru, sold for $2.6 million in January.