Thursday, December 7, 2023

Covid effect boosts property market

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The rural real estate market has continued its recent upward swing. Real Estate Institute of New Zealand (REINZ) rural spokesperson Brian Peacocke says there were 386 farms sold from June to August, the best for that three-month period since 2016, when there were 393 sales.
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This year’s increase represented 121 more sales than for the same period last year, a rise of about 45%.

Grazing farms accounted for the largest number of sales for the three months with a 31% share of sales, followed by finishing at 30%, horticulture at 14% and dairy at 3% of sales.

The median price per hectare for all farms sold during that time was $25,65, an increase of just over 1% on the $25,346 for the same period a year earlier.

Property Brokers general manager – rural Conrad Wilkshire says one of the reasons for the high number of sales is a “covid effect”. 

When the country went into lockdown earlier this year, it put a dam up on the flow of farm sales, but once the market could begin operating again, sales that had been held up came through, along with the usual number for the time of year.

That’s led to plenty of work for those working in rural real estate.

“We had a very busy July (for rural property), probably the best we’ve ever had,” Wilkshire said.

Conrad Wilkshire | September 29, 2020 from GlobalHQ on Vimeo.

Twelve of the 14 regions the REINZ data is divided into showed an increase in farm sales for the three months ending August, the biggest movers being Canterbury with 24 more and Manawatu/Whanganui with an increase of 21.

At the other end of the spectrum, Bay of Plenty farm sales for the same period fell by three, while Nelson had one less.

Nationally, there were 1252 farms sold in the year to August. About 7% fewer than the same period the year before, with about 23% less dairy, 14% less grazing,15% less finishing and 6% more arable farms sold during the same period.

Wilkshire says investment returns on rural land continue to improve.

He says looking at the dairy sector as an example, recent payouts have been healthy but the price of land has remained relatively stable, so return on investment has been reliable.

“Underlying yields continue to improve. It’s the best value opportunity in agriculture for a long time,” he said.

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