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.
There were 395 farm sales in the three months to March 2022, down 10.6% on the three months ended March 2021.
In the year to March 2022, 69 more farms were sold compared to the year to March 2021, with 37.3% more dairy farms sold and 24.4% fewer dairy support farms sold.
On a price per kgMS basis the median sales price was $35.27/kgMS for the three months ended March 2022, compared to $32.63/kgMS for the three months ended February 2022.
The median price per hectare for all farms sold in the three months to March 2022 was $29,795 compared to $25,915 recorded for three months ended March 2021, up 15%.
REINZ rural spokesman Brian Peacocke says that while the March 2022 data reflects an easing, total farm sales are still well ahead of the March 2020 numbers.
“Climatic conditions around the country dominate discussions with variable rainfall in Northland, very dry in the Waikato, wet and cold in Hawke’s Bay, unseasonably damp in Canterbury, and drought conditions in lower Otago and Southland,” Peacocke says.
“Production has suffered or responded accordingly which is a frustration for those impacted negatively given the indications of a record price for the dairy payout, strong prices for beef and lamb, and extremely bright prospects for income in the horticulture sector.”
One thing to watch out for, Peacocke says, is the cautioning rises in the Official Cash Rate, the consequential rises in interest rates, rises in the cost of production including wage increases, all of which is exacerbated by the increases in the cost of fuel.
Peacocke says that despite this, the lifting of Covid restrictions and the prospect of offshore travel again on the horizon, morale in the rural sector seems to be good.
