Friday, March 29, 2024

Finishing farms keep market ticking

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Prices for finishing farm sales slipped slightly over the latest year but turnover remains strong.
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There are indications demand is exceeding supply and in some areas dairy and dairy-support land is being sold for sheep and beef farming, Real Estate Institute rural spokesman Brian Peacocke said.

Southland is one of them, adding to the busy activity in finishing farm sales in the three months to the end of December, nearly equalling the very good results achieved at the corresponding time in 2016. 

Peacocke reports steady finishing sales in Northland and Hawke’s Bay, very strong activity through Waikato and northern King Country with a number of sales of smaller units bolstering the figures and solid sales right through the South Island.

The Waikato sales came at a time when there was a solid fall in dairy farm sales in the province. In many instances vendor price expectations exceed those of buyers and the gap is not being bridged.

“When they’ve not sold some have been withdrawn from the market,” Peacocke said.

Most sale programmes for the high number of spring listings have been completed. Fresh listings are expected but not in the same numbers, Peacocke said. 

Dairy farm deals have been lower throughout the upper North Island, holding par in lower North Island areas and at miserable levels in the central South Island.

The latter point fits in with Canterbury research indicating tighter Overseas Investment Office rules have shut down foreign investment in large-scale dairy farms, which is having a negative impact on smaller-farm activity.

Peacocke reported reasonable sales activity for grazing properties through Northland, Gisborne, Waikato, Hawke’s Bay and Canterbury and extremely good results in Manawatu and Wanganui.

Arable farm sales  have picked up, with Canterbury activity being the best three-month result for a considerable time.

Institute figures show there were 440 farm sales in the three months to the end of December, up from 336 for the three-months to the end of November and 394 sales in the December period a year earlier. There was a 3.8% fall in the year-on-year sales, at 1505.

The median price per hectare for all farms sold in the latest December period was $27,288, down from $29,266 a year earlier, a 6.8% fall. 

The fall from the November three-months was 10.3%.

The institute’s All-Farm Index was up very marginally month-on-month and fell 0.7% year-on-year. The index adjusts for difference in farm size, location and farming type, which the median price does not do.

For dairy farms, the median price for December was $40,589/ha, down from $50,964 for November, and $40,484 for December 2017. 

Though the median price was lower the institute’s Dairy Farm Index rose 6.3% from November to December, after allowing for those farm size and location differences. Year-on-year the index was marginally lower.

For finishing farms to the end of December the median price was $31,169/ha compared to $32,635 for November and $32,000 for December 2017.

A lower median price for grazing farms was also recorded, at $10,192/ha, from $11,835 in November and $11,937 in December 2017, for a year-on-year fall of 14.6%.

Horticulture block sales data can be affected by a small number of sales at especially high or low prices and the median price for the latest period, at $164,143/ha, was down from $196,142/ha in November and $242,988 in December 2017, for a year-on-year fall of 32%.

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