Rural property prices strengthened over August, despite low sales figures in the traditionally quiet month.
Figures released yesterday by the Real Estate Institute of New Zealand showed the median sale price for grazing, dairying and horticultural property increased $77,500 or 7.6 per cent to $807,500 in the August year.
Theprice for lifestyle property increased 16 per cent to $335,000.
Only 170 farms were sold in August - a month where sales reach a relative low-point - compared with 175 in August last year.
However, 665 lifestyle properties were sold, up from 608 in August last year.
REINZ vice-president Murray Cleland said demand, assisted by consistent farm returns over recent years and investor interest from the cities, had consistently exceeded supply, putting upward pressure on prices.
"Dairying prices have nearly doubled since early 2003 and grazing properties are not far behind."
The latest dairying median selling price for August was $2.7 million, compared with $2.2 million in July and $2.3 million in August last year.
In early 2003 dairying prices were selling at a median of between $1.5 million to $1.7 million, although individual monthly figures varied, suggesting prices were now close to double that of two years ago, said Cleland.
In the grazing sector the pattern was the same, with the latest median for August up to $677,722, compared with $660,000 in July and $650,000 in August last year. In early 2003 grazing property prices were tracking at between $500,000 to $570,000.
The horticultural property median was up from $676,250 in July to $868,500, compared with the August 2004 median of $622,500.
In the lifestyle property sector, prices jumped around markedly with the national median down from $352,000 in July to $335,000, with big fluctuations on low volumes in the provinces.
On a regional basis, Northland recorded the biggest drop in sales of farms and lifestyle properties, dropping 58 per cent and 26 per cent respectively. Canterbury recorded the biggest increase, more than doubling the number of farms sold, while lifestyle properties sold increased by 49 per cent.
Waikato recorded the highest median sale price for a farm at $1.2 million, and Auckland had the highest median for lifestyle property at $590,000.
