Property report: Rural market hits a low but there’s hope for the future

Peter Newbold, general manager PGG Wrightson Real Estate.

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The rural property market has reached “the bottom,” but “won’t need a lot of change for things to move forward.”

That was the message from the general manager of PGG Wrightson Real Estate, Peter Newbold yesterday, in his monthly interview with the Country’s Jamie Mackay.

The volume of recent sales was down between 50 to 65 per cent on 2021 figures, Newbold said, with factors such as farm gate returns, interest rates and the cost of doing business all continuing to have a big impact.

Newbold said realistic pricing was hugely important and he felt that vendors who weren’t prepared to adjust their expectations to meet the market were “better off not listing”.

“Purchasers aren’t going to pay over [the odds for properties], and, especially, their banks are not going to let [them] borrow the money to do so.”

Newbold said sheep and beef properties were “probably the most challenging area in the rural real estate market at the moment” due to low returns.

“When you look at what they’re getting for their sheep at the moment, it’s not a good picture.”

Despite the challenges, Newbold remained steadfast in his belief the market will lift.

“Sentiment is a key driver in real estate and it won’t need a lot of change for things to move forward because when you look at where we are at the moment, it’s right at the bottom.”

“And so, I think we’ll see gradual increase.”

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On the dairy front, a number of recent transactions gave Newbold longer-term confidence in the sector.

“I think as we move into the spring market, we’ll see more listings come into play and we’ll see more activity definitely in dairy.”

Also in yesterday’s interview: Peter Newbold and Jamie Mackay discussed a rural property on the market in Northland and paid tribute to PGG Wrightson GM Wool, Grant Edwards, who sadly passed away earlier this month.