Milk processors have raised their milk price forecasts this month following a 74% increase in the price for whole milk powder on the GlobalDairyTrade platform since early July.
Production has declined in key exporting nations like New Zealand, Australia and the European Union, and demand from major markets like China is picking up.
The Real Estate Institute Dairy Farm Index gained 1.7% in the three months to November compared to the three months to October and improved 4.1% compared to November 2015.
REINZ rural spokesman Brian Peacocke said the increased sales reflected improving conditions in the rural market, "but the predominant comment in the marketplace is that a mood of caution prevails."
"This is evidenced by detailed pre-purchase due diligence investigations, and a level of concern amongst purchasers regarding volatility of income," Mr Peacocke said.
For the three months ending November, the median sale price per hectare for dairy farms was $47,385 and 45 properties sold, compared with $40,716 for the three months ending October.
Ten regions recorded increased sales volumes in the November quarter compared with the previous year, with Otago the highest, followed by Northland and Canterbury.
In Otago and Canterbury, dairy volumes were light but the finishing, grazing and arable sectors did better.
Grazing properties accounted for the largest number of sales at 36% in the three months to November, while finishing properties accounted for 24%, horticulture properties 16% and dairy properties 10%.
The four property types accounted for 85% of sales in the quarter.
