Tony Verdon: Cheaper Northland prices luring out of towners

Photo / Glenn Taylor

Dairy farming in Northland is undergoing the biggest shake-up the sector has seen in more than 50 years with a wave of outsiders taking advantage of comparatively cheap farmland.

Northland dairy farms are being valued at about a quarter of the price of some properties in regions such as the Waikato and Taranaki.

In the past 18 months $20 million of Northland dairy farms have been sold to Waikato, King Country, Taranaki, Canterbury and Westland farmers moving into the province.

The sales were brokered by real estate agency Bayleys, which expects the trend to accelerate this year.

Bayleys showed more than half the properties sold on a national roadshow last year, presenting copies of a portfolio showcasing the farms presented at seven industry seminars.

The company will replicate the Northland Dairy Expo this spring, and expects even more of the province's farms will be bought by out-of-towners.

Bayleys Northland rural manager Tony Grindle said the company planned to take more than a dozen Northland dairy farms on an expo designed to showcase the best of Northland dairy units through a week-long road show to Hamilton, New Plymouth, Palmerston North and Auckland.

"The motivation is simply about the economics of dairy farming -- and the price of quality primary productive land in Northland compared to most other parts of the country," Grindle said.

"Last year we took 11 Northland dairy units on the roadshow and all of those available sold. So it was a proverbial no-brainer to do it again this year."

There was stronger interest this year from Northland farmers wanting to promote their properties to buyers from traditional dairy areas elsewhere in the country.

Grindle said that, generally, most young Northland farmers wanting to get into the dairying sector simply didn't have the financial muscle being brought to the region by out-of-town buyers who were selling their high-value units in New Zealand's most productive pastoral zones.

Real Estate Institute figures show the average cost of dairy farms in Northland was $15,555 a hectare. By comparison, the REINZ figures show the average cost a hectare of dairy farms in the Waikato was $49,000 and in Taranaki was as high as $55,000 an hectare.

Grindle said reasons Northland farmers had chosen now as a good time to sell their properties included the drop in Fonterra's forecast milk solids payout for the 2024/15 financial year, a lack of succession planning for some older farmers looking to retire, and the second consecutive dry season for those in the western coastal region of Northland, and "it just being the right time for those individuals and families that have been weighing up their options for the past few seasons".

CHANGING HANDS

Northland dairy farming units which changed hands to out-of-towners in the past year included:
• A 292ha Pouto dairy farm milking 600 cows, which sold to Taranaki buyers for $3.7m.
• A 370ha Ruawai dairy farm producing 220,000kg of milk solids bought by a Canterbury farmer for $7.3m.
• A 283ha mixed-use beef and dairying unit at Matakohe bought by a Canterbury farmer for $2.7m.
• An 80ha Ruawai dairying unit sold to a Canterbury farmer for $2.8m.
• Whangarei and Maungaturoto farms sold to buyers from the Waikato.
• A 425ha Aranga farm sold to a King Country buyer for $2. 7m.
• A 285ha Dargaville dairying unit sold to a buyer from the West Coast of the South Island for $1.33m.