Farm sales a boost for ru­ral sec­tor

South Waikato News - - RURAL DELIVERY -

A rush of dairy prop­erty trans­ac­tions in De­cem­ber has helped lift the me­dian farm sale price to the high­est level of the year in the lat­est Real Es­tate In­sti­tute of New Zealand Ru­ral Mar­ket statis­tics re­leased this month.

‘‘The 30 dairy farms sold in De­cem­ber is a huge boost for the ru­ral sec­tor and has brought about a sig­nif­i­cant im­prove­ment in the mar­ket,’’ said Real Es­tate In­sti­tute of New Zealand ru­ral mar­ket spokesman Peter McDon­ald.

‘‘It marks a re­turn to con­fi­dence in dairy­ing which is more than jus­ti­fied by the pos­i­tive re­turns be­ing achieved.’’

From $968,500 at the end of Novem­ber 2010, the na­tional me­dian farm sale price rose to $1,150,000 for the three months to De­cem­ber 2010.

This was a 15 per cent in­crease on the me­dian of $1,000,000 for the last three months of 2009, but still be­low the me­dian of $ 1,525,000 for the equiv­a­lent pe­riod in 2008.

‘‘The price per kilo­gramme of milk­fat solids av­er­aged $41 in De­cem­ber, up $4 a kilo­gram on the Novem­ber fig­ure, but across the coun­try ranged from $29 a kg up to $63 a kg,’’ Mr McDon­ald said.

‘‘There was also a huge vari­ance in the price per hectare with two farms in Taranaki sell­ing for about $ 58,000 a hectare and oth­ers for less than $25,000 a hectare.

‘‘This wide vari­a­tion in prices was ex­pe­ri­enced through­out the coun­try.’’

With the high­est price paid $18.2 mil­lion, the av­er­age size of the dairy farms sold in De­cem­ber was about 146ha, with an av­er­age milk solid pro­duc­tion of 982kg/ha. The av­er­age price a hectare was $38,479, al­most $5700 up on the per hectare price for dairy farms in Novem­ber.

In the last three months of 2010 there were 213 farm sales, an in­crease on the 170 sold in the three months to the end of Novem­ber, but still down on the 241 sales in the three months to De­cem­ber 2009.

‘‘The up­turn in sales is due to the banks re-en­ter­ing the mar­ket,’’ Mr McDon­ald said. ‘‘ How­ever they are show­ing a strong pref­er­ence for sup­port­ing sub­stan­tial pur­chasers at the top end of the mar­ket. Ven­dors leav­ing in fi­nance has also helped make many of the trans­ac­tions hap­pen.’’

Com­pared to De­cem­ber 2009, me­dian farm sale prices at the end of last month were down in Waikato from $ 1,550,000 to $1,500,000 and Bay of Plenty from $997,500 to $875,000.

Pur­chases of graz­ing and dairy sup­port blocks were lower than last year but Mr McDon­ald ex­pected buyer in­ter­est to im­prove as a con­se­quence of the up­swing in the mar­ket for dairy farms.

The na­tional me­dian sell­ing price for a life­style prop­erty in the three months to De­cem­ber 2010 was $445,000, which is up on the me­dian of $431,750 for the three months to Novem­ber 2009 but down on the me­dian of $464,000 for the last three months of 2009.

Photo: FILE

BUMPER MONTH: Thirty dairy farms were sold in De­cem­ber.

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