Farm turnover second lowest on record

Photo / Brett Phibbs

The average land price per hectare for all types of farm sales has tumbled by two thirds in just a year, and the number of farms sold in August was the second lowest since Real Estate Institute of New Zealand (REINZ) records began in 2003.

REINZ said today that from a peak of NZ$90,125 in August 2009, the average price per hectare of all types of farms fell to just NZ$29,739 in August this year. That's a drop of NZ$60,386, or 67 per cent.

REINZ spokesperson Bryan Thomson said the market was "stalled" and would remain that way while there was no pressure to buy or sell rural property.

People weren't prepared to sell for a lower price unless they had to, and while they had high levels of debt, he said.

Dairy farmers in particular were sitting tight while milk solid prices and income remained high, rather than "sell and quantify a loss".

Just 48 farms were sold during August, including just three dairy farms, compared to the average sales level for August over the previous four years of 140 per month.

In terms of total farm sales, the only month to record lower sales was January this year with 46.

The three dairy farms sold was the second lowest monthly figure, behind only August last year when none sold.

The 27 grazing properties sold was also the second lowest, after 18 sales in January 2010.

The average August price of the three dairy farm sales was $2,543,333, and the average price per hectare dropped to $31,598 from $36,435 in July.

The average price per kilogram of milk solids has fallen to $33 from $37 in July, $40 in June and $45 in May.

In the three months to August, 17 dairy farms were sold. That was one less than in the same period last year and well down on the 67 in the three months to August 2008.

A total of 192 farms sold in the three months to the end of August, up from 183 in the same period last year, but well down on the 516 in the three months to August 2008.

REINZ said the national median farm sale price rose to NZ$1,127,754 for the three months to August from $1,118,500 for the three months to July.

However, it remains well below the $1,742,500 median for the equivalent period of 2008, but is slightly higher than the median for all farms of $1,000,000 recorded in the same period of 2009.

"With the low number of sales currently occurring, price fluctuations, both upwards and downwards, can be impacted by the range of prices of the mix of properties being sold," REINZ said.

"On a regional basis the largest number of farm sales during the three months to August was 31 in Canterbury, 24 of them grazing properties, and 27 in Southland, 11 of them grazing properties."

During the past year median farm prices have fallen in eight out of the 14 districts.

In the three months to August compared to the same period in 2009, farm sale prices fell in Waikato from $1,663,655 to $1,187,500, Bay of Plenty from $1,000,000 to NZ$920,000, Hawkes Bay from $1,800,000 to $945,000, Manawatu/Wanganui from $1,275,000 to $1,200,000, Wellington from $3,005,000 to $1,935,000, Canterbury from $1,300,000 to $1,200,000, Otago from $937,500 to $712,000, and Southland from $1,200,000 to $1,125,000.

Sales of lifestyle properties dropped to 1066 in the three months to August from 1088 in the three months to July, with the national median selling price slipping to NZ$436,750 from $447,500.

- INTEREST.CO.NZ with NZ HERALD ONLINE