Cheap land lures southerners

Bayleys auctioneer Gary Caldwell got the bidding for a 58.6ha Parua Bay farm off at $800,000 but had to take his jacket off to work it up to $1.2 million, which secured the property for first-farm buyer Colin Logue of Tomarata. Photo / John Stone

Low-priced Northland dairy farms are luring buyers seeking bargains, according to Bayleys Real Estate, which claims to have sold more Northland dairy farms over the past 12 months than all other real estate companies in the region combined.

First-farm owners, large corporate farmers and Waikato cockies downsizing to release capital without reducing production are eager to own Northland farms seen as "cheap as" in the south, says a Bayleys review of 2013/14 sales.

Northland dairy farms were selling for the lowest prices in the country a year ago. Real Estate Institute of New Zealand (REINZ) figures show the median dairy farm sales price in the region for the three months to April last year was $15,395 a hectare.

The next lowest regional price for the same period was West Coast on $20,530/ha.

High flyers were Canterbury on $45,283, with Waikato and Bay of Plenty both around $40,500, and the national median was $34,819 a hectare.

Little has changed since then. REINZ noted strong first-farm purchase activity in Northland during the first quarter this year, when the median price a hectare for the 102 dairy farms averaging 125ha sold around the country was $34,474.

Meanwhile, Bayleys says it has buyers looking at top-tier Northland dairy farms priced from $20,000 a hectare, including some with high-producing soils which, by New Zealand standards, have been undervalued.

A 58.6ha dairy farm at Parua Bay was sold for $1.2 million, or $20,477 a hectare, at a Bayleys auction in Whangarei on May 9.

Bayleys' agent John Nelley said half a dozen share-milkers from Waikato and Bay of Plenty either bid by telephone or turned up on the day for the sale. The farm, owned by Ean Brown and Margaret Galland trading as KVC Farms, is milking 120 cows and is on target to produce 30,000kg milk solids this season. It has a three-bedroom house with a self-contained flat attached, a 12-a-side herringbone milking shed and other barns. Its capital value was $1.16 million.

Auctioneer Gary Caldwell took off his jacket to work the bidding up and briskly sold the farm to first farm buyer Colin Logue, 38, of Tomarata.

Logue said he had looked at farms further south and considered he had got good value for money at Parua Bay.

Northland Federated Farmers dairy section chairman Ashley Cullen of Maungaturoto said low Northland dairy farm prices were good because they gave young farmers somewhere to start.

"There's a saying that if you can farm in Northland you can farm anywhere," he said.

A group of Canterbury farmers were investing in Ruawai, "buying up farms like it's going out of fashion".

"They paid good money, so that should help push the price for Northland dairy farms up a bit," he said.