Dairy farms unsold in cautious market
Twenty-nine dairy farms created by Carter Holt Harvey around Tokoroa are still on the market.
The listing of the properties was announced in January this year and interest in the farms was understood to be high.
But uncertainty over foreign land deals is thought to be weighing heavily on efforts to sell the farms.
Carter Holt Harvey had initially hoped to sell the properties for a total of $224.5 million.
But a real estate agent involved in the marketing effort said interested parties were waiting for the outcome of the Crafar farms deal to set the tone on foreign farm ownership.
Bayleys agent Mike Fraser-Jones said the Crafar decision was likely to have an impact on both prospective buyers and price.
‘‘ It’s all about cost, I suppose and the effort that people are putting in to do things, that if there’s not going to be a reward at the end of the day, they don’t want to go down that track.’’
The Crafar farms, now in receivership, are subject to an Overseas Investment Office decision on whether Hong Kong-backed Natural Dairy consortium can complete the purchase.
The 16-farm deal is controversial because of the backers’ anonymity and the financial troubles of business associate May Wang. Two months ago, the Serious Fraud Office said it was investigating the deal.
In August the Government said it was reviewing the approval of agricultural land to foreigners, which in recent times has averaged about 82 hectares a day.
Stephen Franks, a company law expert and former ACT list MP, said uncertainty would remain in the area of foreign land sales until the Government removed the element of political ‘‘ second guessing’’ involved.
‘‘Essentially I think they are sitting on their hands, wondering what to do. They have. . . signed up to a whole lot of free trade agreements which say quite expressly that you must treat foreigners the same as New Zealanders.
‘‘So they’ve got this huge dilemma, how do they renege on their free trade agreements. . . and yet respond to New Zealanders’ fears of being peasants in their own land.’’
Mr Franks said the OIO used to have a ‘‘ very clear set of criteria administered outside the political process’’ but appeared to be moving towards the political Australian model and rural land reflected the uncertainty.
But John Larmer, a Taranaki-based farm valuer with Telfer Young, said farm sales all over the country were low, as even locals put purchase plans on hold.
With fluctuations in product prices and tighter bank loan criteria, buying had dried up.
‘‘I don’t think it’s a conscious ‘ hey I’ll wait and things will come down.’ I think they’re not in a space to make that decision as they’re dealing daily with the effects of the drought or their low lamb drop.’’
FOR SALE, STILL: The 29 Carter Holt Harvey farms are still on the market.