Buy­ers re­main re­al­is­tic in ru­ral mar­ket

Matamata Chronicle - - Property - RICHARD LEACH

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.’’

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.

SUPPLIED

This 79-hectare dry­s­tock block, Pu­taruru, sold at auc­tion for $2.4 mil­lion.

SUPPLIED

This 57-hectare dairy farm, in Pu­taruru, sold for $2.6 mil­lion in Jan­uary.

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