Dairy farm price slashed by half

Spring grass growth has been strong in Northland, but REINZ rural spokesman Brian Peacocke says there has been insufficient supply to meet the demand for farms in Northland, where an easing in prices was anticipated.

Twenty-one of the 30 Northland farms sold in the three months to October 31 were grazing units averaging 66ha with a median sale price of $9600 a hectare, down from $11,861 a hectare at this time last year and $13,146 in October 2013.

The single Northland dairy farm in Real Estate Institute of New Zealand (REINZ) rural market sales figures for October was 226ha and fetched $11,947 a hectare, well down on the $21,231 median for dairy farm sales in the region at this time last year.

REINZ rural spokesman Brian Peacocke said there was insufficient supply to meet the demand for farms in Northland, where an easing in prices was anticipated.

Features of the October market included volatile Global Dairy Trade auction prices, projected benefits from the Trans Pacific Partnership Agreement, the increasing number of farms on the market, especially in the greater Waikato region, and speculation surrounding the value of such properties, he said.

However, two Northland finishing farms sold in the three months to October 31 averaged 295ha and sold for a median price of $13,759 a hectare, almost $3000 ahead of the $10,800 a hectare sales median for regional farms in this category last October.

Four Northland horticulture blocks sold in the three months to October 31 averaged 5ha and fetched a median $138,724 a hectare, down from the $206,667 median for regional orchard sales at this time last year.

A 2ha Northland forestry block sold in the three months to October 31 for $67,797 a hectare and a 2ha arable farm fetched $178,571 a hectare.

The median sales price for the 18 dairy farms which changed hands nationally in the three months to October 31 was $31,552 a hectare, with Bay of Plenty topping regional prices on $39,127 and Canterbury runner-up on $37,722 a hectare.

The 153 grazing units among the 358 farms sold nationally in the three months to October 31 averaged 48ha and had a median sales price of $19,253 a hectare.

The 68 horticulture blocks averaging 8ha sold nationally in the three months to October 31 (including 24 in Bay of Plenty and 12 each in Auckland and Nelson) had a median sale price of $171,482 a hectare.

Meanwhile, with 260 lifestyle block sales in the three months to October 31, Northland had the third highest regional tally of 2123 national sales after Auckland (476) and Waikato (357).

The median price for Northland lifestyle sales was $347,500 a hectare - similar to October last year - and Mr Peacocke said the lifestyle market in the region was healthy and prices steady. In Auckland, the median price for lifestyle land has increased to $1.035 million a hectare from $875,000 last October. Mr Peacocke said bare land in Auckland was in short supply with 1ha blocks being pushed into the $500,000 range.

"There is especially strong interest in land likely to gain consent for subdivision, with designated Special Housing Areas a particular point of focus," he said. Northland lifestyle median sale prices were the third lowest nationally last month, with Manawatu/Whanganui ($326,000 a hectare) and West Coast ($120,000) the only regions with lower prices.