Latest stats show farm sales cooling
PROPERTY: Increasing degree of caution mingled with emerging resentment towards government, says REINZ
Erosion of the increased equity due to increases in costs is having a sobering effect across the sector. — Brian Peacocke Real Estate Institute
Farm sales appear to have cooled, with the latest data from the Real Estate Institute of New Zealand (REINZ) showing 126 fewer farms were sold in the three months to August, compared to the same time last year.
The overall number of farms sold in the year to August was also down on last year, with 278 fewer farms sold.
REINZ rural spokesperson Brian Peacocke said a few factors were probably behind the drop.
“Reasons for such reductions will inevitably be varied but are likely to include an increasing degree of caution mingled with emerging resentment towards central government, inexorable increases in costs across the board, and widespread volatility in climatic conditions,” Peacocke said.
“Tasman, Nelson, Marlborough, Taranaki and the Far North are at the forefront of those regions most impacted by the turbulent extremes in weather being experienced more frequently across the country,” he said.
“From a financial perspective, strong levels of income in recent seasons have allowed significant debt reduction across much of the rural sector, albeit erosion of the increased equity due to increases in costs is having a sobering effect across the sector.”
Peacocke expected more farms would hit the market in the next few months because spring was traditionally when most farms looked the best and were put up for sale.
“It’s seasonal and in many respects for dairy farmers, influenced by the fact that the settlement date for dairy farms, when properties change hands, is the first of June,” he said.
“So drystock properties, finishing or grazing, will be alternative times to that, not necessarily linked to the first of June, so that becomes a barometer or a guide for sale activity as well because there needs to be a certain period of time between a sale being concluded and settlement.”
High commodity prices in recent seasons had helped farmers pay down debt and save more money, which would come in handy for those looking to buy, Peacocke said.