Property report: Farm to forestry conversions ‘not slowing down’

Peter Newbold, general manager PGG Wrightson Real Estate. Photo / Supplied.

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The Country’s Jamie Mackay talks to the GM of PGG Wrightson Rural Real Estate, Peter Newbold, about the sheep and beef farms that are being sold and how many are going to trees.

Newbold said that while he couldn’t give an exact amount, in some regions he would say more than 50 per cent were going into forestry.

He said it was “not slowing down” and in the areas that PGG was aware of “it’s still taking place and underpinning a lot of the values”.

Mackay asked what type of forestry farming it was going to be - production forestry, carbon farming, or a mix of the two - and whether Newbold received that kind of information.

Newbold said PGG knew most of the people who were in carbon or trees, and PGG had a fair idea of what would take place with those properties.

Mackay asked about the recent, strong interest in sheep and beef properties, having got the news yesterday from Beef + Lamb New Zealand that profitability was going to be down 30 per cent.

He asked if there was still that enthusiasm for those wanting to stick with sheep and beef to buy.

“There’s still a strong buyer pool out there,” Newbold said.

He said that throughout the country, the only thing worth noting at the moment was that a lot of farmers were looking to move on and it was not easy to pass down to family.

Things like inflation, interest, profits or age were just some of the potential reasons why.

Newbold believed over the next 12 to 18 months many farms would come to the market due to those reasons - with succession and retirement being at the forefront.

Meanwhile, Cyclone Gabrielle’s effects were still being felt in the North Island.

Mackay asked how it would affect rural real estate prices in areas such as Hawkes Bay, East Coast, Tairāwhiti/Gisborne, Coromandel and Northland.

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Newbold said he had seen the devastation for himself.

“I think at the moment, you know, a lot of people are just taking a breather, and rightly so”.

He said properties that hadn’t been affected would likely still operate and be sold as normal but due to there being so much going on now, things would be pushed out or put on hold.

Jumping back to farming, Mackay asked if there was any interest in dairy at the moment.

There had been a bit of a lull but some positive activity had been taking place in the $5 to $10 million range, Newbold said.

He thought there would be more activity over the next few months.

Moving onto the lifestyle market, Mackay said it would make more sense to buy an existing one rather than try and build.

Newbold believed that the lifestyle and residential market would pick up, more so in the spring but currently, there were so many things going on, and people were unsettled.

This meant there was a real opportunity to do homes up rather than build, especially with prices having gone up anywhere from 10 to 30 per cent in some cases.