Buy­ers still wary in am­ple mar­ket

South Waikato News - - RURAL DELIVEY -

Seller con­fi­dence has in­creased in the ru­ral prop­erty mar­ket in the Waikato and na­tion­ally but buy­ers have yet to catch on to the more pos­i­tive out­look, say real es­tate ex­perts.

Real Es­tate In­sti­tute of New Zealand national ru­ral spokesman Brian Pea­cocke said the num­ber of ru­ral prop­er­ties on the mar­ket had in­creased this spring but not many had sold yet.

Last month na­tion­wide, 50 graz­ing farms had sold but only four dairy farms.

‘‘There’s still a bit of cau­tion there among buy­ers,’’ said Mr Pea­cocke, Pas­toral Realty prin­ci­pal.

Spring and au­tumn were al­ways the strong­est sell­ing times for ru­ral prop­er­ties but this spring had seen con­sid­er­ably more prop­er­ties on the block than the pre­vi­ous two springs.

There were 50 to 70 ru­ral prop­er­ties for sale in the Waikato, more than dou­ble the num­ber on the mar­ket at the same time last year, Mr Pea­cocke said.

Rea­sons for the in­crease in­cluded the higher dairy pay­out prices even ac­count­ing for the re­cent 45c/kg milk­solids pay­out cut, favourable in­ter­est rates for bor­row­ing and one of the best grow­ing sea­sons in many years, Mr Pea­cocke said.

‘‘There are plenty of buy­ers around look­ing but they’re a bit slow to com­mit yet. Once you have a few more prop­er­ties sell­ing, peo­ple will see a few more op­tions. You get a snowball ef­fect, al­beit a con­trolled snowball ef­fect. I don’t think there will be a sud­den surge in pric­ing.’’

An­other trend was that banks were more op­ti­mistic than they had been and in some cases more op­ti­mistic about lend­ing money to farm­ers than farm­ers were about bor­row­ing.

‘‘That means the banks have got over their cau­tion faster than farm­ers,’’ he said. ‘‘That’s in marked con­trast to two years ago where there was a nose­dive in con­fi­dence among the banks which in turn led to a nose­dive in con­fi­dence among farm­ers.’’

Ru­ral prop­er­ties to­day still had to stack up from a cash­flow and eq­uity per­spec­tive to qual­ify for loans, Mr Pea­cocke said.

PGG Wright­son’s Hamil­ton ru­ral sales man­ager John Sis­ley, said the com­pany had more ru­ral prop­er­ties listed than it had seen for the last two years.

‘‘The higher pay­out has given ven­dors the con­fi­dence to put their farms on the mar­ket,’’ Mr Sis­ley said. ‘‘The 45c pay­out re­duc­tion was a bit of a flat­tener but it hasn’t stopped the ac­tiv­ity. We’ve had an ex­tremely good spring other­wise and peo­ple are very happy about that. We’re see­ing quite a few buy­ers but they are, al­most with­out ex­cep­tion, rea­son­ably cau­tious.

‘‘There is some con­fi­dence in dairy and a bit more con­fi­dence back in sheep and beef.

‘‘But with all the con­straints out there, I think it’s most un­likely we will see the lev­els of op­ti­mism we saw three years ago or 15 years ago,’’ he said.

Bay­leys coun­try sales man­ager Mark Dawe, said this was the best spring Bay­leys had seen for the last four years in ru­ral sales.

Most of the sales were in the dairy or dairy-re­lated sec­tor.

‘‘There’s some good prop­erty there for peo­ple to se­lect and some very mo­ti­vated ven­dors wish­ing to sell,’’ Mr Dawe said.


RU­RAL WIN­NER: Con­fi­dence has in­creased in the ru­ral mar­ket.

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