KEY POINTS:
The price for rural land, particularly dairy farms, is continuing to rise.
Last month's national median farm price rose to $1,860,000, up from April's $1,810,000.
Dairy farms remain the blue chip investment of the sector. Figures out yesterday from the Real Estate Institute (Reinz) showed dairy farm prices
had climbed from a median $3,900,000 in April to $4,050,000 last month.
Lifestyle property prices fell from $455,000 in the quarter to April, to $450,000 in the quarter ended May. The volume of these properties also fell, from 1438 sales in the April quarter to 1335 in the period ended May.
Farm sale numbers nationally across all categories also dropped, from 786 in the quarter to April to 745 in the quarter to May.
Northland farm prices rose from a median $1.6 million in April to $2.2 million in May when 46 properties traded.
Farm prices in the Auckland region were static at a median of $1.2 million and 29 farms sold in the area last month. Waikato farm sales were swift at 112 deals last month for a median of $2.4 million, down from April's $2.7 million.
Bay of Plenty prices fell from $1.5 million in April to $1.4 million last month when 50 properties were traded. Fifteen farms sold in the Gisborne area for a median of $1.2 million, down from April's $1.29 million. Taranaki farm prices rose from $1.1 million in April to $1.5 million last month when 48 farms sold.
Peter McDonald, Reinz's rural spokesman, said confidence in the rural sector showed no sign of waning.
The economy might not be in the best shape and the fuel price shock was expected to hit farming quite seriously but that was not coming through in the sales figures.
BNZ chief economist Tony Alexander said the number of farm sales in the May quarter was 8.4 per cent ahead of a year ago.
"The market is very strong and although in the May month the change was down 13 per cent on a year ago, this follows a 41 per cent rise in April. The market ... could even get stronger now that farmers can see the dollar tracking downward," Alexander said.
He is only interested in the volume of sales, not the dollar value. "The price measures shouldn't be examined in my opinion, for periods less than three months, preferably six months. Each month's average is badly affected by changes in the type of farm sold, location and size."
A BNZ weekly survey conducted in the last fortnight had produced resoundingly positive responses from sheep and beef farmers, Alexander said. "This suggests some improving activity in their sector on top of dairying."