Dairy Sector Drives Strong Rural Property Market Activity in NZ
The latest data from the Real Estate Institute of New Zealand (REINZ) reveals a mixed rural property market due to consistent inflation concerns.
For the three months ended August 2016 the median sales price per hectare for dairy farms was $40,469 (14 properties), compared to $35,614 for the three months ended July 2016 (32 properties), and $26,906 (21 properties) for the three months ended August 2015.
The median price per hectare for dairy farms has risen 50.4% over the past 12 months. The median dairy farm size for the three months ended August 2016 was 100 hectares.
On a price per kilo of milk solids basis, the median sales price was $45.51 per kg of milk solids for the three months ended August 2016, compared to $33.62 per kg of milk solids for the three months ended July 2016 (+6.6%), and $37.50 per kg of milk solids for the three months ended August 2015 (+13.6%).
The REINZ Dairy Farm Price Index rose 6.6% in the three months to August 2016 compared to the three months to July. Compared to August 2015, the REINZ Dairy Farm Price Index rose 6.0%. The REINZ Dairy Farm Price Index adjusts for differences in farm size and location compared to the median price per hectare, which does not adjust for these factors. Care needs to be taken during the winter months as the low level of sales (14 for the three months to August) can distort the Index figures.
