Buyers hunting for right farm
It could be that buyers are hunting out the right farm to purchase as farm sales drop for the three months ended December 2023. That’s according to the Real Estate Institute of New Zealand (REINZ).
Data released last week shows there were 81 fewer farm sales (-20.0%) for the three months ended June 2022 than for the three months ended June 2021. Overall, there were 325 farm sales in the three months ended June 2022, compared to 412 farm sales for the three months ended May 2022 (-21.1%), and 406 farm sales for the three months ended June 2021.
In the year to June 2022 1,659 farms were sold, 220 fewer than in the year to June 2021, with 9.5% more dairy farms, 32.8% fewer dairy support, 21.7% fewer grazing farms, 10.2% fewer finishing farms and 12.7% fewer arable farms sold over the same period.
The median price/ha for all farms sold in the three months to June 2022 was $28,040 compared to $27,180 recorded for three months ended June 2021 (+3.2%). The median price per hectare decreased 6% compared to May 2022.
The REINZ All Farm Price Index increased 0.1% in the three months to June 2022 compared to the three months to May 2022. Compared to the three months ending June 2021 the REINZ All Farm Price Index increased 28.9%. The REINZ All Farm Price Index adjusts for differences in farm size, location, and farming type, unlike the median price per hectare, which does not adjust for these factors.
Four regions recorded an increase in the number of farm sales for the three months ended June 2022 compared to the three months ended June 2021, with the most notable being Southland (+8 sales) and Manawatu-Whanganui (+5 sales). Northland (-19 sales) and Gisborne/Hawke's Bay (-18 sales) recorded the biggest decreases in sales. Compared to the three months ended May 2022, one region recorded an increase in sales, the most notable being Auckland (+1 sales).
REINZ rural spokesman Brian Peacocke notes that as is the normal pattern for this time of the year, the onset of winter and the changeover date for dairy farms traditionally impacts total sales volumes throughout the country.
"Interestingly enough, the result for the three-month period ending June 2022 (325 sales) reflects a decrease of 17.5% from the three-month period ending June 2021 (406 sales 12 months ago), whereas the most recent result for June 2022 (325 sales) compared to the same period ending June 2020 (255 sales 2 years ago) reflects an increase of 21.5%, so the current result still reflects a reasonably solid market,” he says.
“Dairy farm sales are down 20% from the equivalent period 12 months ago, but double the number achieved for the June quarter in 2020, two years ago.
“By comparison, sales numbers of finishing units for the June quarter just finished compared to the June quarter 12 months ago are similar but have actually increased by 62% from the volumes achieved two years ago. That reflects a substantial lift last year which is being maintained this year.
“Sales of grazing blocks reflect a 30% decrease for the comparable period 12 months ago, but a gain of 27.5% compared to two years ago.”
