Friday, March 29, 2024

North Canterbury affordable for local buyers

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More sheep and beef farms are selling in North Canterbury than other parts of the province as lower prices help local buyers increase the scale of their farming operations. Most sales are of small to medium properties, Colliers International valuer Tim Banks said. 
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As well as established farmers buying to increase scale there are also younger farmers buying their first farms with family assistance or selling so they can buy larger units.

Dairy farmers are also active in some non-dairying areas buying land for grazing in attempts to become self-contained in their animal management to mitigate the risk of Mycoplasma bovis. 

North Canterbury prices tend to be lower than through the rest of the province, where there is more dairy and arable farming to drive values higher, Banks said.

Those areas probably have greater reliance on foreign buyers, now more restricted under Government rules, to provide market liquidity. 

There’s no sign yet of forestry interests outbidding sheep and beef farmer buyers for land, compared to some parts of the country where there have been deals at above pastoral values.

Though farming confidence is at lower levels because of bank and Government policies and compliance issues North Canterbury has a history of inter-generational and long-term farming outlook and that is reflected in recent activity.

Banks said the Colliers group believes a market trend will emerge where the saleability and value of farms will be based strongly on their productivity levels, including good fertiliser history, regrassing programmes and quality infrastructure to enhance operating cashflows rather than from a focus on capital gain. 

That means the price gap between low and high-quality properties is likely to widen further.

An example of that is a Darnley Rd, Waipara, farm of just 137ha, which sold at $19,618/ha or $1648 a stock unit for $2.7 million in November with the premium for its irrigation. 

A 128ha farm at Elliots Rd, Greta Valley, sold for $2.4m in December, representing $18,697/ha or $1476 a stock unit.

Other sales included:

  • Lyndon Rd, Waiau, a 227ha farm sold in March for $4.1m, representing $18,003/ha or $1394/stock unit.

  • A Glenmark Drive, Waipara, farm of 249ha sold in November for $3.15m, representing $12,637/ha or $1267/stock unit.

  • Okuku Pass Rd, Okuku, 909ha sold in January for $3.92m, being $4311/ha or $1160/stock unit.

  • Pahau Downs Rd, Culverden, $6.65m for 844ha, in December, $7879/ha or $1108/stock unit.

  • Birch Hill Rd, Okuku, 240ha for $4.5m in May last year, $8011/ha or a good $1554/stock unit.

  • Random Spur Rd, Cheviot, also in May last year, 647ha sold for $3.75m, $5796/ha or $761/stock unit.

  • Blunts Rd, Kaikoura, 1181ha for $3.4m in March last year, $2878/ha or $1100/stock unit.

  • Glenkens Rd, Cheviot, also in March last year, 705ha for $3.8m, $5393/ha or $958/stock unit.

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