Saturday, March 30, 2024

Market shows hint of easing

Avatar photo
A hint of easing in the rural real estate market excludes exceptional properties which are still in strong demand.
Reading Time: 2 minutes

But those properties were in short supply.

Otherwise, caution was a strong theme and prices had been volatile, Real Estate Institute rural spokesman Brian Peacocke said.

An indication of the caution was a lower strike rate in auctions in dairy-rich Waikato though sales overall had increased compared to last year.

The Healthy Rivers plan, particularly rules around nitrogen levels on different soil types, meant a lot of due diligence by prospective buyers, usually reinforced by the banks when their funding was required.

Sales had been increasing with 438 in the three months to the end of March compared to the 436 in the three months to February and 383 in the March period last year.

The institute’s All Farm Price Index was marginally easier month-on-month in the latest period and up 5.5% year-on-year. The index adjusted for difference in farm sizes, location and type. The median price comparison, which didn’t do that, showed a 1.1% lift to $27,509/hectare in March compared to $27,202 a year earlier.

Median prices for horticulture blocks rose sharply, with a figure of $317,726/ha, up from $269,034/ha in February and $261,665/ha in March last year.

That was largely caused by the kiwifruit industry, which had some very good sales for Gold orchards in Bay of Plenty and for land there where the new Gold cultivar could be grown now regulators had increased the planting area. That was pulling up the overall average, Peacocke said.

The viticulture and pipfruit sectors were also performing strongly but had a much lower property sale turnover than kiwifruit.

A feature of the dairy farm market was increasing turnover in sales of second and third tier quality farms, indicating vendors were now setting more realistic prices and buyers were meeting them.

In Northland good dairy farms in good locations were selling well and lower-category units were now being targeted by some beef farmers, unable to buy finishing farms because of short supply, Peacocke said.

That trend had been noticed earlier in southern Hawke’s Bay and Wairarapa.

“That this has resurfaced reaffirms that dairy farmers haven’t much interest in buying unless the quality is really good.

“Variable contours and distance from processing plants are an issue for some dairy farms but not a concern for beef farmers.”

Dairy farm turnover in the South Island from Canterbury to Southland was light. There was renewed interest among dairy farmers in Canterbury to buy dairy support blocks.

During the March period, the median dairy farm price was $37,066/ha, down from $39,642/ha in February.

However, there was still a 9.4% lift from March last year when the median was $33,897/ha.

The institute’s Dairy Farm Index fell 7% from February to March but the March figure was 6.3% higher than at the same time last year.

Activity remained strong in Otago for good sheep and beef properties.

The March period median price for finishing farms fell from February to March, to $24,584/ha from $27,595/ha but was well up from the $21,453 in the March period last year. That was a 14% increase.

Total
0
Shares
People are also reading