Xmas boost for rural property market

Dairy farm sales have helped push up farm sales prices, says the Real Estate Institute. Photo / Sarah Ivey

A rush of dairy property transactions in December has lifted the median farm sale price to the highest level of the year, according to the latest rural property stats released today.

"The 30 dairy farms sold in December is a huge boost for the rural sector and has brought about a significant improvement in the market," said Real Estate Institute of New Zealand rural market spokesman Peter McDonald. "It marks a return to confidence in dairying which is more than justified by the positive returns being achieved."

The national median farm sale price rose to $1,150,000 for the three months to December 2010.

This was up 15pc on the $1m median price seen in the last three months of 2009. For the equivalent period in 2008, the median was $1.52m.

McDonald said there was a huge variance in the price per hectare with two farms in Taranaki selling for approximately $58,000 per hectare and others for less than $25,000 per hectare. This wide variation in prices was experienced throughout the country."

In the last three months of 2010 there were 213 farm sales, an increase on the 170 sold in the three months to the end of November, but still down on the 241 sales in the three months to December 2009.

McDonald said the sales upturn was due to banks re-entering the market.

"However they are showing a strong preference for supporting substantial purchasers at the top end of the market. Vendors leaving in finance has also helped make many of the transactions happen."

-HERALD ONLINE