Dairy farm sales rise 20 per cent from a year ago
Dairy farm sales around the country have shot up by 20 per cent as confidence enters the industry, says real estate agent Peter Barnett.
The co-owner of Feildingbased NZR said last year’s tally of dairy farms sold was low after being hit by a low milk payout.
This had improved and in many regions, dairy farm sale numbers were similar to those in the high payout season of 2014.
The big dairying regions led the way, with more dairy farms sold in Waikato, then Taranaki and Northland and Southland, than last year.
Barnett said smaller regions such as Hawke’s Bay, Wairarapa, Manawatu and Whanganui had seen lower numbers of transactions, but this was expected to change next season.
‘‘Both buyers and sellers gain confidence by seeing other sales occurring, which helps them make decisions to sell or buy and the market gains momentum.
‘‘With not enough transactions happening for people to develop confidence around benchmarks and it makes it harder to make a decision if you are a buyer or a seller.
‘‘More transactions makes people more confident.’’
He said there was no price differential with the payout and it was the same no matter where a person farmed.
It was just a matter of time for sales activity to flow from bigger regions to smaller regions.
‘‘Therefore next year I believe we’ll see a lot more dairy farms sold in our local region.
Barnett said sheep and beef farms were in super short supply.
‘‘It is the area that is the most unsupplied relative to demand. There hasn’t been much on the market at all. There is demand, but sheep and beef farms for sale are at historic lows and have been for the past two years.’’
He said he didn’t know the reason for the shortage but it was a cycle and would change.
Good sheep and beef farms had sold for more than they would have four years ago.
Barnett said the Manawatu market for lifestyle blocks was also tight on supply.
‘‘It is linked to the house market and has more correlation to that than the farm market.
‘‘The house market is strong and so the lifestyle market demand has flowed on from that.’’
He said there had been quite a bit of bare-land subdivision near towns and cities, as farmers earmarked some land for lifestyle blocks and kept the rest to reduce their debt levels or pursue other opportunities.