Rural Real Estate Market Ends 2012 Strongly

News Release 17 January 2013

Rural Real Estate Market Ends 2012 Strongly

Summary

• Farm sales increase 36 per cent compared to November
• Median $/ha price rose almost 13 percent compared to December 2011
• Noticeable increase in interest in dairy properties in Northland, Waikato, Taranaki, Canterbury and Southland.
• Lifestyle property sales lift 28% compared to December 2011

Data released today by the Real Estate Institute of NZ (“REINZ”) shows there were 101 more farm sales (+35.9%) for the three months ended December 2012 than for the three months ended November 2012. Overall, there were 382 farm sales in the three months to end of December 2012, compared with 353 farm sales in the three months to December 2011, an increase of 29 sales (+8.2%). 1,454 farms were sold in the year to December 2012, 21.9% more than were sold in the year to December 2011.

The median price per hectare for all farms sold in the three months to December 2012 was $23,070; a 12.8% increase on the $20,445 recorded for three months ended December 2011. The median price per hectare increased by 0.8% compared to November.

The REINZ All Farm Price Index rose by 1.1% in the three months to December compared to the three months to November, from 3,069.52 to 3,103.88. Compared to December 2011 the REINZ All Farm Price Index increased by 0.4%. Further details on the REINZ All Farm Price Index are set out below.

Seven regions recorded increases in sales volumes for the three months ended December 2012 compared to the three months ended December 2011. Auckland recorded the largest increase in sales (+17 sales), followed by Nelson (+14 sales) and Waikato (+13 sales). Seven regions recorded decreases in sales volume with Canterbury recording the largest fall (-10 sales), followed by Southland (-8 sales) and Bay of Plenty (-7 sales). Compared to the three months ended November 2012 twelve regions recorded an increase in sales, lead by Waikato (+19 sales).

“The farm sales market saw a healthy increase in volumes in most categories in December, with only Horticulture and Forestry being the exceptions.” says REINZ Rural Market Spokesman Brian Peacocke.

“In the North Island we have seen an increase in activity from sharemilkers, particularly in Northland and Taranaki, and more activity in Waikato focused on dairy properties and dairy support units. In the South Island there has been more interest and activity in finishing units and medium sized dairy farms in Southland, while in Canterbury there has been very good activity in arable farms, dairy and finishing units.”

Grazing properties accounted for the largest number of sales with 45.0% share of all sales over the three months. Finishing properties accounted for 16.8%, Dairy properties accounted for 16.5% and Horticulture properties accounting for 8.9% of all sales. These four property types accounted for 87.2% of all sales during the three months ended December 2012.

Dairy Farms
For the three months ended December 2012 the median sales price per hectare for dairy farms was $34,483 (63 properties), compared to $37,166 for the three months ended November (30 properties), and $37,045 (50 properties) for the three months ended December 2011. The median dairy farm size for the three months ended December 2012 was 90 hectares.

Included in sales for the month of December were 35 dairy farms at a median sale value of $33,681 per hectare. The median farm size was 89 hectares with a range of 33 hectares in Waikato to 270 hectares in Canterbury. The median production per hectare across all dairy farms sold in December 2012 was 945kgs of milk solids.

The REINZ Dairy Farm Price Index fell by 1.9% in the three months to December compared to the three months to November, from 1,799.35 to 1,765.90. Compared to December 2011 the REINZ Dairy Farm Price Index fell by 10.3%. Further details on the REINZ Dairy Farm Price Index are set out below.

Finishing Farms
For the three months ended December 2012 the median sales price per hectare for finishing farms was $18,852 (64 properties), compared to $18,950 for the three months ended November (44 properties), and $20,445 (57 properties) for the three months ended December 2011. The median finishing farm size for the three months ended December 2012 was 98 hectares.

Grazing Farms
For the three months ended December 2012 the median sales price per hectare for grazing farms was $16,511 (172 properties) compared to $16,829 for the three months ended November (138 properties), and $13,854 (194 properties) for the three months ended December 2011. The median grazing farm size for the three months ended December 2012 was 60 hectares.

Horticulture Farms
For the three months ended December 2012 the median sales price per hectare for horticulture farms was $89,139 (34 properties) compared to $88,889 (31 properties) for the three months ended November, and $137,055 (23 properties) for the three months ended December 2011. The median horticulture farm size for the three months ended December 2012 was nine hectares.

Lifestyle Properties
The lifestyle property market saw a 28.4% (+358 sales) increase in sales volume in the three months to December 2012 compared to December 2011. 1,618 sales were recorded in the three months to December 2012 compared to 1,260 sales in the three months to December 2011. 102 more sales were recorded compared to the three months to November 2012 (+6.7%). Sales in the month of November were the strongest since December 2007.

12 regions recorded increases in sales compared to November while one recorded a decrease in sales. Auckland recorded the largest increase (+27 sales), followed by Bay of Plenty (+21 sales) and Canterbury (+11 sales). Compared to December 2011 nine regions recorded increases in sales with five regions recorded decreases. Auckland recorded the largest increase in sales (+135 sales), followed by Waikato and Manawatu/Wanganui with 50 sales each.

The national median price for lifestyle blocks improved by $15,000 (+3.2%) from $475,000 for the three months to November 2012 to $490,000 for the three months to December 2012 to reach a new record high. Compared to three months to December 2011 the median price rose by $13,750 (+2.9%).

The number of days to sell for lifestyle properties improved by two days, from 63 days for the three months to the end of November to 61 days for the three months to the end of December. Compared to the three months ended December 2011 the number of days to sell improved by 21 days from 82 days to 61 days. Southland recorded the shortest number of days to sell in October at 39 days, followed by Otago at 45 days and Taranaki at 49 days. West Coast recorded the longest number of days to sell at 230 days, followed by Bay of Plenty at 108 days and Northland at 70 days.

Commenting on the lifestyle property market Brian Peacocke said, “Those properties close to the main centres, and Auckland in particular, are experiencing solid demand, although there is little pressure on prices in these areas.”

“The lifestyle property market overall is in good health with rising volumes and a new record median price reached this month.”

REINZ All Farm Price Index – Additional Data
The table below sets out the returns for the REINZ All Farm Price Index for the three months ending December 2012.

The graph below shows the trends in the REINZ All Farm Price Index compared to an index of movements in the $/hectare measure of farm prices.

REINZ Dairy Farm Price Index – Additional Data
The table below sets out the returns for the REINZ Dairy Farm Price Index for the three months ending December 2012.

The graph below shows the trends in the REINZ Dairy Farm Price Index compared to an index of movements in the $/hectare measure of farm prices.

ends

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