Saturday, March 2, 2024

Farm listings surge as tensions rise in rural sector

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Real Estate Institute of NZ flags concerning trends.
Real Estate of New Zealand rural spokesperson Brian Peacocke says widespread discontent in the farming sector could be behind the rise in rural properties for sale.
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Widespread discontent in the rural sector has spilled over into the rural real estate market with a surge in farms being listed for sale.

Real Estate Institute of New Zealand (REINZ) rural spokesperson Brian Peacocke said reports indicate a high number of farms on the market.

This, along with a levelling-out in farm sales following a 53% fall the month before, indicates some concerning trends in the rural sector, he said.

“Just what is triggering this large surge of properties for sale is yet to play out,” he said.

“Tension in the farming ranks is palpable; discontent with central government policies is intense; frustration regarding inexorable cost increases is a dark cloud; and given the profits recently announced by the banking sector followed by spiralling interest rates, accusations of price-gouging by the trading banks are now emerging,” he said.

There is also a mood of caution in the sector given that market-related signals reflect an easing in price levels for beef, lamb and dairy products. This is sobering and food for reflection, he said.

 “Land values will inevitably come under scrutiny, particularly for the range of properties other than those considered by virtue of location, contour and a high standard of improvements to be at the top end of the quality range. 

“On the positive side, extended periods of rain over much of the country is providing great conditions for spring grass growth and crop emergence, which is really pleasing for those on the land.”

REINZ’s latest data for October showed farm sales were down by 97, or -35.9% for the three months ended October compared to the same period 12 months ago. Overall, there were 173 farm sales during those three months.

In the year to October, 1501 farms were sold, 284 fewer than were sold in the year to October 2021, with dairy farm sales down 7.2%, dairy support blocks back 20.4%, 16.0% fewer grazing farms, 13.2% fewer finishing farms and the same number of arable farms sold over the same period.

The median price per hectare for all farms sold over the three months to October 2022 was $25,270 compared to $31,360 recorded for three months ended October 2021, a drop of  -19.4%.

The median price per hectare increased by 9.8% compared to September 2022.

In the regions, Manawatū-Whanganui and the West Coast recorded increases in sales, up by five and four sales respectively, while Waikato and Canterbury recorded the biggest decrease in sales, back by 21 sales each.

In comparison to the three months ended September 2022, six regions recorded an increase in sales with the most notable being Gisborne/Hawke’s Bay, Manawatū/Whanganui and Southland, where three sales were recorded in each region.

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