Finishing blocks in hot demand

Auckland farm buyers are interested in attractive Northland finishing units and farm purchasers from around the country are after good sheep and beef farms in the North.

Smaller attractive Northland finishing units in good locations are appealing to Auckland buyers, according to a Real Estate Institute of New Zealand (REINZ) report on farm sales for the three months ended November 2016.

The institute says there was a steady market with Northland farms attracting interest from across the country, but insufficient numbers of properties were available in the region to satisfy inquiries for good sheep and beef farms.

Northland was among 10 regions which recorded increases in sales volume for the three months ended November 2016 compared with the the same quarter in the 2015.

Otago recorded the largest increase (+15 sales), followed by Northland (+14), and Canterbury (+11).

REINZ rural spokesman Brian Peacocke said the increase reflected improving conditions in the rural market, but the predominant comment in the marketplace was that a mood of caution prevailed.

"This is evidenced by detailed pre-purchase due diligence investigations and a level of concern amongst purchasers regarding volatility of income," he said.

"While the increase in the milk payout is great news and has extended the lifeline for some, it is clear financial institutions are maintaining expenditure restrictions on their client base and, as would be expected, are insisting on fiscal prudence. The above factors are contributing to a lack of confidence in some areas."

Nationally, REINZ data shows there were 447 farm sales in the three months ended November 2016, compared with 353 farm sales for the three months ended October 2016 (+26.6 per cent), and 416 farm sales for the three months ended November 2015.

In the year to November 2016, 1803 farms were sold, a 1.9per cent rise on the previous year, with 21per cent fewer dairy and 6per cent fewer grazing farms sold.

Grazing properties accounted for 36per cent, finishing properties 24per cent, horticulture properties 16per cent, and dairy farms 10per cent of all sales over the three months to November 2016.

The median sales price per hectare for the 45 dairy farms averaging 98ha sold over those three months was $47,385, compared with $40,716 for the three months ended October 2016 (17 properties), and $35,554 (42 properties) for the three months ended November 2015.

The median price per hectare for dairy farms has risen 33 per cent over the past 12 months.

On a price per kilo of milksolids basis, the median sales price was $41.05kgMS, compared with $34.64kgMS for the three months ended October 2016 and $34.83 kgMS for the three months ended November 2015.

The median sales price per hectare for the 159 grazing farms averaging 75ha sold was $12,573, compared with $15,242 for the three months ended October 2016 (143 properties), and $16,949 (161 properties) for the three months ended November 2015.

The median price per hectare for grazing farms has fallen 26per cent over the past 12 months.

The median sales price per hectare for the 70 horticulture farms averaging 8ha was $189,916,compared with $182,584 (65 properties) for the three months ended October 2016, and $176,783 (67 properties) for the three months ended November 2015.

The median price per hectare for horticulture farms has risen 7per cent over the past 12 months.

The median price per hectare for all farms sold in the three months to November 2016 was $26,348 compared with $28,671 recorded for the three months ended November 2015. The median price per hectare rose 1.4 per cent compared with October.

Meanwhile, REINZ data shows 2205 lifestyle properties were sold nationally in the three months ended November 2016, compared with 2175 lifestyle property sales for the three months ended October 2016 and 2200 for the three months ended November 2015.

There were 9108 lifestyle properties with a value of $6.91million sold in the year to November 2016, 14per cent more than were sold in the year to November 2015.

The median price for all lifestyle properties sold in the three months to November 2016 was $25,000 higher at $570,000 compared with the three months ended November 2015. The median price also rose $25,000 compared to October.

Mr Peacocke said it was interesting that the median price for sales in the three months to November was reflecting a solid increase from the previous three month period and, at $570,000, was distinctly stronger than the $545,000 level at November 2015 and $515,000 for the same period two years ago.