Ru­ral mar­ket pos­i­tive but re­cov­ery still slow

South Waikato News - - RURAL DELIVERY -

De­mand for ru­ral prop­er­ties is steadily in­creas­ing, with the mar­ket reach­ing its most pos­i­tive level in four years, ac­cord­ing to PGG Wright­son.

The agency’s gen­eral man­ager, Stu­art Cooper, said the lat­est fig­ures re­flected the most pos­i­tive mar­ket change in four years.

How­ever, he em­pha­sised the mar­ket had come off a ‘‘fairly deep’’ level and was still only about 60 to 70 per cent of a ‘‘nor­mal’’ mar­ket.

‘‘We would say it’s more of a steady re­cov­ery than a boom. It’s a re­cov­ery that is more dis­ci­plined. We don’t have silly things hap­pen­ing that hap­pened in 2008, where peo­ple were bor­row­ing nearly 100 per cent money.’’

Cur­rent de­mand was strongly fo­cused on dairy farms through­out the whole coun­try, Mr Cooper said.

‘‘Look­ing at our busi­ness, ev­ery area of New Zealand is up sub­stan­tially over last year. The fun­da­men­tals of dairy­ing look very good.’’ Most in­ter­est was in the large-scale dairy­ing heart­land ar­eas of Waikato, Can­ter­bury and South­land.

Taranaki was also do­ing well but did not gen­er­ally have much large-scale farm­ing, Mr Cooper said. ‘‘Peo­ple look­ing to in­vest in farms, in­clud­ing cor­po­rates, farmer groups and farmer con­sor­tiums, want scale.’’

The in­creas­ing trend of cor­po­rate in­volve­ment in farm­ing had brought greater dis­ci­pline to farm pur­chases, Mr Cooper said.

Most peo­ple buy­ing farms now had a strong busi­ness fo­cus and were spend­ing longer on due dili­gence. The time pe­riod from a prop­erty go­ing on the mar­ket to pur­chase had dou­bled from about 90 days to about 180 days.

‘‘While a farm can look good, peo­ple are now look­ing be­low the grass and be­hind the scenes to make sure the farm is a good busi­ness propo­si­tion.

‘‘When peo­ple come to look at farms these days, they are bring­ing ac­coun­tants, lawyers and con­sul­tants, too, to en­sure they know clearly what they are get­ting. That’s good for ev­ery­body.’’

Real Es­tate In­sti­tute ru­ral mar­ket spokesman Brian Pea­cocke said while de­mand for farms was in­creas­ing, there was not nec­es­sar­ily an up­ward trend in pric­ing apart from where there was a short­age of very good prop­er­ties.

DE­MAND IN­CREASES: Ru­ral prop­er­ties are a sought-af­ter com­mod­ity.

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