Rural real estate prices running strong

The rural property market is still going strong despite growing signs that farmers may face a drop in income next year.

Large volumes of dairy farm sales in November drove the median sale price for all farms back above $1 million, the latest Real Estate Institute figures show.

The national median farm price reached $1.14 million last month, compared with $825,000 in October and $940,000 in November last year.

Dairy farm sales jumped from a seasonal low of just 19 in October to 54, although the median selling price was down slightly from $2.5 million in October to $2.36 million.

Real Estate Institute vice-president Murray Cleland said that despite the negative impact of the exchange rate, the rural economy was still enjoying a run of good returns and good production conditions.

There have been hints in the past month that international commodity prices may be starting to fall - something that could seriously hurt the rural economy if the dollar maintains its current strength.

Cleland said the market for lifestyle blocks had also remained buoyant, enjoying the best of both worlds with a connection to the strong residential property market and the rural economy.

The median sale price for lifestyle properties was down slightly, from $385,000 in October to $380,000 in November.

But volumes were up from 677 to 770.

In the Auckland region, the median farm price was $1.125 million in November. In the Waikato - where dairy farms dominated the sales list - the median price was $2.16 million.

Nationally, grazing properties continued to be the most heavily traded farm type. There were 105 sold in November, up from 97 in October.