Rural Market Remains Confident

The events of September 11 have not impacted greatly on the rural property market, which has recorded a positive outlook for the seventh consecutive quarter according to a Massey University survey.

The University’s Real Estate Analysis Unit’s latest rural market real estate survey has recorded a positive outlook on the back of good commodity prices, a low kiwi dollar and low interest rates, despite the changed economic climate after the events of September 11.

The survey forecasts increased levels of sales for dairy farms (net 29%), hill country sheep and beef farms (net 36%) and arable/fattening farms (net 27%), compared with the same period last year.

For the third consecutive quarter the survey is less optimistic about sales volumes. Forestry sales are forecast to remain the same and horticultural property turnover rates are predicted to fall (-15% net).

Further price increase are forecast for dairy farms (net 22%), hill country sheep and beef farms (net 36%) and arable/fattening farms (net 36%).

The outlook for the pastoral sector remains positive but has declined by an appreciable amount since the last survey. It is likely that uncertainties about the impact of a slowing world economy and the war in Afghanistan have impacted on this decline.

The survey predicts there is a possibility the rural market may well be near the peak of the current cycle.

The outlook for horticultural blocks is that market prices will remain unchanged and there is a negative outlook for forestry (-7% net).

The survey is based on confidential questionaries completed by a panel of rural real estate market experts from the banking, real estate and valuation professions. Readers are reminded that it takes a “broad brush” approach to forecasting changes in the rural property market.

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