Farm sales mark rural revival

By Cassandra Mason


Confidence in the agricultural sector is recovering in Hawke's Bay, where farm sales are on the rise.

The Real Estate Institute of New Zealand's (REINZ) rural market report showed 512 farms were sold nationwide in the three months ending in May - 10 per cent more than during the same period last year and the highest number for a May quarter since 2008.

There were also 69 more farm sales than in the previous quarter - a 15.6 per cent jump.

In the year to May, farm sales rose 6.6 per cent to 1490.

The report revealed 24 farms were sold in Hawke's Bay during the May quarter, compared to 19 a year ago. However, the value of rural property in Hawke's Bay slumped year-on-year, from $21,479 per hectare to $13,780.

Federated Farmers Hawke's Bay provincial president Will Foley said confidence in the agriculture sector was improving.

"There certainly seems to have been a few sales recently. They've definitely picked up from where they were in the peak of the drought."

Positive outlooks for dairy, sheep and beef farmers - who have growing demand and good overseas prices - could be driving the property trend, he said.

The Ruataniwha dam project could also be increasing optimism.

"People could be taking a punt, thinking land prices could go up once the dam project is up and running."

With the drought over, morale had definitely improved.

"Weather does funny things to people and since the drought's broken, people are almost starting to say 'this is one of the best winters we've had'.

"It's warm, we've got the moisture back in the ground, the grass is growing at above average rate for this time of year. Things like that give people confidence."

Meanwhile, the value of rural property has risen nationally too, with the median price per hectare jumping 20.4 per cent compared to last year, from $17,031 to $20,499.

Waikato, Auckland and Northland notched up the most sales in the May quarter, compared to last year.

Southland recorded the largest fall of 11 sales, followed by Nelson and Canterbury.

"Inquiry in all farm categories is consistently strong in all regions, in contrast to the normal seasonal pattern in winter," REINZ rural market spokesman Brian Peacocke said. "The increased dairy payout, lower New Zealand dollar and continuing low interest rates are the key drivers of increasing farm confidence across the country."

The confidence boost has brought about a shortage of listings, and farms put up for sale were pulling crowds and multiple offers at open days, he said.

Dairy farms were doing especially well, with the number of sales strongly ahead of the previous year, reflecting "an increasing degree of confidence within the dairy industry", Mr Peacocke said.

Rising confidence in the lifestyle sector was also leading to more sales around Auckland and Christchurch, and the Waikato.

"Across the country cautious optimism is being expressed that buoyancy in the rural sector will push positive cash flows into the wider economy." APNZ

- Hawkes Bay Today

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