Farm sale values creep up as listings slowly rise
Farm values have lifted by 4.6 per cent over the past year, with volumes also edging higher by 1.4 per cent.
But Real Estate Institute of NZ spokesman Brian Peacocke cautioned against over optimism, saying it would take more than a year before the benefits from higher dairy prices fed through to farmers’ bank balances.
‘‘I would describe it as a gentle consolidation. There are still some dairy farmers who are under pressure. It would be premature to be too optimistic.’’
‘‘Financier instigated activity, particularly in the north-eastern Waikato, confirms recent comments from the Reserve Bank that some farmers may struggle to cope with the debt levels built up over recent seasons, with selling being the only option in such cases,’’ Peacocke said.
In the year to May, 1790 farms were sold, 1.4 per cent more than were sold in the previous year. By value, finishing farms rose the most, followed by dairy.
The median price per hectare for finishing farms climbed 13 per cent, and for dairy farms 3.8 per cent. On the minus side, the median price per hectare for grazing farms fell 13.3 per cent and horticulture 25.6 per cent.
Peacocke said he was not able to explain the drop in value of horticulture properties when the industry was so buoyant.
Nine regions recorded increases in sales volume for the three months ended May compared to the three months ended May the year before. Waikato recorded the largest increase in sales (+23 sales), followed by Otago (+16 sales) and Southland (+14 sales).
PGG Wrightson real estate general manager Peter Newbold predicted values were likely to keep rising in the next few months, fuelled by the recovering dairy market.
He said that even though farmers were unlikely to see material benefits flow through immediately, the signals of a higher dairy payout offered confidence.