The market for finishing farms also continued strongly, with the median price per hectare for finishing farms increasing 11.2% over the past 12 months.
The Real Estate Institute of New Zealand’s (REINZ) December figures showed that 11 of the 14 regions recorded an increase in the number of farm sales for the three months ended December 2020 compared to the three months ended December 2019, with the most notable being Waikato with 42 more sales and Northland with 28 more sales.
Finishing farms accounted for the largest number of sales with a 33% share of all sales over the three months to December 2020, grazing farms accounted for 26%, dairy accounted for 15% and horticulture accounted for 11% of all sales.
These four property types accounted for 84% of all sales during the three months ended December 2020.
REINZ rural spokesperson Brian Peacocke says the sales figures for the three-month period ending December 31 reflect a further consolidation in the results which have been emerging in recent months.
The ongoing strength of the dairy market through December and into January had yet to be reflected in sales. While deals were happening, it was still requiring work to get them done and auctions are not being overwhelmed with buyers.
He says more vendors were also accepting that market values had eased and they had to be more flexible in their expectations.
Peacocke says it looked as if the banks were starting to show a renewed interest in lending in the dairy industry.
“We’re starting to see a few chinks in the armour and as we have gone through spring, the banks are starting to get more involved,” he said.
He speculated it could be due to the Australian-owned banks’ attempt to reduce its exposure to the dairy industry, with Rabobank being the exception.
“I suspect they might have had to change their tact a little bit in order to maintain market share,” he said.
“The big response we are seeing is that the banks are being more actively involved than what they have been for quite a while.”
However, it was generally farm owners who were taking advantage of this rather than first farm buyers.
The skyrocketing land values seen in the residential market were not being seen in the rural land market, but there were signs of it in the lifestyle market.
Sales volumes for the three-month period ending December reflected a continuation of the extraordinary run of sales over recent months in that sector where there was an increase in the median price in every district across the country giving a record national median price of $835,000.
The median price for dairy farms in the three months ending December 2019 compared to the same period in 2020 fell 13.2%, while values on finishing farms, grazing and horticulture farms rose 11.2%, 4.2% and 18.2% respectively.
He says it was clear there had been a trend for some time where good finishing farms were highly sought-after.
“Across Waikato in particular, we are seeing some of those priced at $50,000-$80,000 a hectare. In other areas the price is not quite that high but the trend is the same,” he said.
He says many of these were being bought by dairy farmers looking for support blocks, along with some interested in sheep milking.
