Farm sales hit new all time low

Photo / David White

The number of farms sold in the first three months of this year has slumped to a new low.

Just 190 farms were sold in the three months ended March 2011 compared to 204 in the three months ended February and 210 in the three months to March 2010, says the Real Estate Institute.

This is continuing the trend of falling farm sales seen across New Zealand over the past three years.

For the year ended March 2011, 869 farms were sold, compared to 2,692 for the year ended March 2008 - a drop of almost 68 per cent.

REINZ Rural Market Spokesman Peter McDonald said the March stats showed the weakest number of farm sales seen in more than 15 years.

"While there are certainly signs of confidence in the rural sector with rising payouts and a strong improvement in sheep and beef farm profitability, this is not yet being translated in property activity."

"This is frustrating for the rural real estate industry, with a number of well presented and sound properties available for sale, and good interest from buyers," said McDonald.

"This may be due to conservatism on the part of buyers in ensuring that properties they are looking at really meet their needs, or continued restraints on rural lending by the banking sector."

Grazing properties accounted for the largest number of sales with 45.2 per cent share of all sales over the three months.

Dairy properties accounted for 18.4 per cent, Horticulture properties 10.5 per cent and Finishing properties 14.7 per cent. These four property types accounted for 88.8 per cent of all sales during the three months ended February 2011.

Included in sales for the month of March were 15 dairy farms at an average sale value of $29,272 per hectare and $34 per kg of milk solids (MS). There was considerable variability in these numbers with the values ranging from $23 per kg of MS in Manawatu to $52 per kg of MS in Taranaki.

REINZ is moving away from reporting median farm prices and will instead report average selling price per hectare figures instead.

The institute said the falling number of farm sales had made the median farm price a less consistent measure of the value of rural properties and moving to average selling prices per hectare "should provide a more reliable and consistent measure of farm values".

For the three months ended March 2011 the average sales price per hectare for dairy farms was $32,533 (35 properties) compared to $36,687 for the three months ended February 2011 (50 properties), and $32,000 (35 properties) for the three months ended March 2010. The average dairy farm size for the three months ended March 2011 was 113 hectares.


- NZ HERALD ONLINE