Ru­ral mar­ket stays re­silient de­spite dairy pay­out drop


Fon­terra’s low­ered milk pay­out this sea­son has failed to put a dent in farm prices and sales com­pared to a year ago.

Ac­cord­ing to the Real Es­tate In­sti­tute, there were 486 farm sales in the three months to De­cem­ber, a 30 per cent fall on the pre­vi­ous three months to Novem­ber and 12.3 per cent lower than the same pe­riod a year ear­lier.

The me­dian price per hectare for all farm types was $28,781, up 19 per cent on a year ago lev­els.

South Waikato mim­icked those na­tional trends, PGG Wright­son re­gional real es­tate man­ager Paul O’Sul­li­van said.

Go­ing off the last five sales in the dis­trict, the av­er­age sale price per hectare was about $45,000, he said.

REINZ ru­ral spokesman Brian Pea­cocke said the ru­ral mar­ket was prov­ing re­silient de­spite the fall in global dairy prices.

Vol­umes and prices in­di­cated a ‘‘strong de­gree of con­fi­dence among the ranks of ven­dors, pur­chasers and fi­nanciers in the medium to longer term fu­ture of the pas­toral in­dus­try’’.

REINZ’s dairy farm price in­dex, which ad­justs for dif­fer­ences in farm size and lo­ca­tion, rose 11 per cent com­pared with a year ago, and Pea­cocke said dairy farm sales were par­tic­u­larly strong in Waikato with record prices for farms in good lo­ca­tions.

Dairy farm buy­ers were ac­tive in Ro­torua and Taupo, and there were solid prices for sheep and beef prop­er­ties in Hawke’s Bay.

O’Sul­li­van, who sold his first prop­erty in the South Waikato in 1978, said the dis­trict was still one of the most favoured ar­eas for dairy farm­ing, in the North Is­land.

But he said he ex­pected the ef­fects from the pay­out drop to kick in soon.

‘‘I’m ex­pect­ing prices to firm or soften a lit­tle.

‘‘In times of eco­nomic re­straint there won’t be a lot of farms for sale, there’s usu­ally less move­ment not more.’’

He said de­mand was al­ready out­strip­ping sup­ply.

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