Sales boost eludes local farmers

Growing confidence in the agriculture sector has seen a jump in farm sales around the country and pushed up rural property prices. But despite an increase in sales reported for Northland, local farmers say the rural property market is still struggling.

The Real Estate Institute of New Zealand's (REINZ) rural market report showed 512 farms were sold nationwide in the three months to May - 10 per cent more than 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 43 farms were sold in Northland during the quarter ending in June, compared to 32 a year ago.

However, the value of rural property in Northland slumped year-on-year, from $16,394 per hectare to $10,329.

Despite the jump in sales, Federated Farmers Northland provincial president Roger Ludbrook said he thought the country's optimism had not reached the Far North.

"There's a lack of sales that's making it quite hard."

Mr Ludbrook said he had been to a Quotable Value (QV) meeting, where expected "significant drops" in farm valuations were discussed.

"As an example, they said, 'A farm that once traded for $30,000 a head is probably going to struggle to make $20,000 a head now'."

Drystock farms were especially affected by low sales, he said.

Mr Ludbrook thought this could be put down to a "little bit of reality" in the market.

Rather than farming a property for 10 years and selling it for a huge profit, people were now looking more warily at properties and choosing ones that would give them return on their investments.

Meanwhile, the value of rural property has gone up nationally, with the median price per hectare rising 20.4 per cent in the May quarter compared to a year ago, from $17,031 to $20,499.

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

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

"Enquiry 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."

Dairy farms were doing especially well, with the number of sales strongly ahead of the previous year, Mr Peacocke said.

APNZ