Rural real estate market is ‘normal’
A surge in Taranaki farms being put up for sale is being put down to the region’s extremely wet winter, according to a leading agent.
In the past fortnight, the number of farms being advertised has gone up by 400% in some publications, although that was not indicative of a booming market, McDonald’s Real Estate principal Peter McDonald said.
‘‘I would say it is no more than normal.
‘‘What we have seen is the grass [growth] is about three or four weeks slower than what it usually is, so they have all come on the market at the same time.’’
McDonald, who has been an agent for 46 years, believed the market was still strong judging by the number of early sales, as well as inquiries being received and the number of potential buyers who were attending open farms.
However, he warned the industry was suffering through a number of challenges, including the recently proposed farm-level emissions pricing scheme.
According to McDonald, the majority of farms listed with his company are from farmers who are preparing for retirement, while potential buyers are predominantly from within the region.
While rising interest rates had the potential to slow the number of farm sales, McDonald still felt it was ‘‘a normal season’’ for his agents.
Bayleys rural agent Brendan Crowley said that while there was no shortage of farms on the market, sales were challenging for a number of reasons.
‘‘There is a lot more to buying a farm now, given all the regulations and compliance issues they have to deal with.’’
Crowley, who agreed farms had come on to the market a lot slower this year due to the high rainfall in Taranaki, said prices had almost doubled since a decade ago which was obviously another consideration for potential buyers.
He was also noticing a number of farms that were coming on to the market were in need of upgrading.
‘‘If you are spending a lot of money, you don’t want to buy one and have to spend a lot more,’’ he said.
Despite the challenging market, Crowley said there remained a strong and positive ambition from buyers to find the right property.
Nationally, the price of a dairy farm to the end of June was $36,755 a hectare.
That was up from $35,310 to the end of June 2021.