Farm sales a boost for rural sector
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.
BUMPER MONTH: Thirty dairy farms were sold in December.