SUP260821NADbrianpeacocke.jpg Brian Peacocke, rural spokesperson for the Real Estate Institute of New Zealand. Photo / Supplied
SUP260821NADclaudeshepherd-barfoot.jpg Northland rural salesperson for Barfoot & Thompson real estate, Claude Shepherd, of Kerikeri. Photo / Supplied
Rural land is in hot demand, with real estate agents desperately looking for properties.
Real Estate Institute of New Zealand rural spokesman Brian Peacocke said Northland was among the regions recording an increase in farm sales over the past three months.
The price per hectare has also remained strong, with the median price per hectare of $27,015 for all farms sold in the past three months to July 2021 up about 12 per cent compared with last year.
He said the median price had eased a bit compared with last month.
Rural land agents are combing the countryside for properties.
Claude Shepherd of Barfoot & Thompson, who specialises in rural deals, said he had buying orders for millions of dollars, if he could just find the land to match to the buyers.
"Beef-to-beef is strong and the beef-to-forestry market is overheated.
"It's not just corporates now chasing these big properties. There are fund managers starting to come in and there are family groups banding together to have a bit of a play,'' Shepherd said.
The impression of all land sales for forestry being to overseas investors was not correct any more.
"It's mostly New Zealand money now, although there is still an overseas component in the bigger company investments,'' he said.
"By banding together, the New Zealand investors are now able to compete with overseas investors.''
Shepherd said the big players interested in forestry blocks and carbon farming were all still there.
With new investors entering the market, he believed there might be some distortion in the prices being realised if inexperience led to higher prices being paid.
"It's a busy puddle with a lot of people wanting to play in it,'' he said.
Demand was exceptionally strong for land suitable for horticulture.
"People are trying to find flat greenfield areas for planting kiwifruit and avocados, particularly in the Bay of Islands but also all around Northland.
"The latest tender round of licences for gold kiwifruit has been between $550,000 and $600,000 per canopy hectare, making it a very expensive business to set up.
"Those who can't get a gold licence are buying land where they can plant green or red kiwifruit, or they are buying existing orchards. Potentially some inland properties that get more winter ground frosts could be converted to green kiwifruit blocks as they require more winter chilling.
"The market is really hot,'' Shepherd said.
While avocado prices have crashed recently, large corporates are taking a long view and continuing to invest in the industry, he said.
"I've still got buying orders and demand is still pretty good.''
Dairy farmers were also looking around for land, with low-interest rates making property investments more attractive.
Peacocke said Northland and Auckland recorded steady sales of finishing and grazing properties.
"Calving and lambing are well advanced and reasonable feed reserves have resulted in extraordinarily high prices being paid for last season's lambs to be finished for the late winter and early spring market.
"The beef schedule is also moving upwards with a promise of more to come, and the dairy industry has been observing the volatility in the global dairy trade auction system.
"Shortages of labour remains a current thorn in the side of all of the rural sector, with compliance issues relating to water and climate change hovering on the periphery of an unrelenting and unsympathetic political landscape,'' he said.
For Shepherd, rural real estate is a rush he never tires of.
"It's exciting with a lot of components in play,'' he said.
"There are no bargains now. People have to put in their best bid to secure a property."
Shepherd said anyone sitting on properties with volcanic soils should check out options for the horticulture market.
"It's not suitable for every property, but I wouldn't want anyone underselling their property when there may be opportunities to double or triple their land value in the horticulture market.
"People need to explore that option,'' he said.