The market was strong and prices solid, with demand exceeding supply.
“There’s not a lot of stock available and that good in maintaining prices. If there was more stock, would it change? I’d say not a lot.”
Spring was when farms generally came on to the market, but Newbold wasn’t sure there would be a boost in the number of sheep and beef properties. “We’re short of listings now and I’m not expecting an excess of stock going into spring.”
This was because many good farms had been converted to dairying in recent years and there had also been amalgamations of sheep and beef farms. Fewer farms led to fewer farms for sale.
“If the supply is there, business is good.”
There was a lot of confidence in beef returns and reports from the Wrightson livestock team were also indicating some reasonably good signs for lambs. Farm sales being made were generally to buyers from within the same district.
The strong outlook applied across the rural sector, except for the well-publicised downturn in dairy farm sales.
“We have a good real estate market other than dairy, sheep and beef, cropping, viticulture, and horticulture, they’re all strong. If you take dairy out we’re not seeing any doom and gloom.”
Horticulture blocks in the Bay of Plenty, Nelson and Marlborough were a highlight, with good opportunity for those looking at succession or retirement to take a profit.
Another highlight was the arable sector in the irrigated mid Canterbury area, where prime land was always in demand in spite of current lower returns. Wrightson’s latest winter report referred to two autumn sales, one at $47,000/ha and the other at $50,000/ha. This was a “blue ribbon” area with strong prospects for growing potatoes and small seeds, such as clover, grass seed, onions and carrots.
Most owners of grazing blocks who had lost their winter dairy-grazing clients were returning to actively farming their properties, largely for beef, rather than selling.
For dairy farms, there was still a price disconnect between buyers and sellers with the exception of quality, well-located farms in the North Island, particularly in the area near the Tatua plant in the Waikato, Newbold said. Otherwise the price per hectare rate had come back.
The smaller size of dairy farms in the North Island was also making them easier to sell at present than South Island farms.
“There’s an expectation about prices needing to change over time, but right now there’s not a lot of sales so no trend emerging.’’
An example was north Otago where there hadn’t been a “decent” dairy farm sale for more than a year.
In Southland, where the price gap between buyers and sellers had been acute, there had recently been a bit of a shift, and pricing was being readjusted. Newbold expected a few more sales there in the spring.
According to REINZ figures, grazing properties made up 35% of all farm sales during the three months to the end of May, with finishing farms making up 22%, followed by horticulture at 17%, and dairy farms 12%.
