Overseas interests may grab up NZ farms

Real Estate Institute of New Zealand president Peter McDonald

New Zealand lenders' apparent lack of confidence is leaving the door open for overseas investors to capitalise on improving prospects for dairying, warns Real Estate Institute of New Zealand president Peter McDonald.

McDonald said while the outlook for dairying was positive, farm sales and prices remained relatively low for the three months to March, indicating local lenders were being too cautious.

"National dairy farm sales are showing a milk solid price averaging $42 per kg. With this year's payout now expected to exceed $6 per kg and prospects for even stronger returns next season, our good operators should be taking advantage of the current affordable values to grow their businesses," he said.

"It would be a shame to have to rely on Chinese investors to kick start our market again," he said.

The national median farm sale price has fallen to $970,000 for the three months to March 2010, slightly down on the median of $1,045,000 for the three months to February 2010.

The total number of farms sold in the three months to March was just 210 compared with 231 and 717 farms sold in the three months to March 2009 and March 2008 respectively.

The Waikato posted 33 farm sales during the three months to March, followed by 27 in Canterbury.

Grazing properties accounted for the largest number of farms by type, with 92 sales recorded throughout the country in the three months to March.

While overall rural property sales remained low, strong interest in lifestyle properties continued.

The national median selling price for lifestyle properties in the three months to March was $440,000, up $2000 on the median prices for the three months to February.

Median prices for lifestyle properties were highest in Auckland at $735,000, against a median of $166,000 on the West Coast.

A total of 1118 lifestyle properties were sold in the three months to March, slightly up on the 1105 sales recorded in the three months to February, and an increase on the 1041 sold in the three months to March 2009.

- NZHERALD STAFF