Demand For Good Property Outstripping Supply

News Release 18 February 2013News Release 18 February 2013

Demand For Good Property Outstripping Supply

• Farm sales increase 13 per cent compared to January 2012 Farm sales increase 13 per cent compared to January 2012
• Median $/ha price rose over 18 percent compared to January 2012 Median $/ha price rose over 18 percent compared to January 2012
• Listings barely able to meet demand at present. Increasing shortage of good quality listingsListings barely able to meet demand at present. Increasing shortage of good quality listings
• Lifestyle property sales lift 22% compared to January 2012Lifestyle property sales lift 22% compared to January 2012
• Lifestyle properties reached a new record median price of $498,500 in JanuaryLifestyle properties reached a new record median price of $498,500 in January

Data released today by the Real Estate Institute of NZ (“REINZ”) shows there were 45 more farm sales (+12.7%) for the three months ended January 2013 than for the three months ended January 2012. Overall, there were 399 farm sales in the three months to end of January 2013, compared with 382 farm sales in the three months to December 2012, an increase of 17 sales (+4.4%). 1,454 farms were sold in the year to January 2013, 18.1% more than were sold in the year to January 2012.

The median price per hectare for all farms sold in the three months to January 2013 was $23,980; an 18.1% increase on the $20,299 recorded for three months ended January 2012. The median price per hectare increased by 3.9% compared to December.

The REINZ All Farm Price Index eased by 2.1% in the three months to January compared to the three months to December, from 3,103.88 to 3,039.77. Compared to January 2012 the REINZ All Farm Price Index fell by 3.2%. Further details on the REINZ All Farm Price Index are set out below.

Seven regions recorded increases in sales volume for the three months ended January 2013 compared to the three months ended January 2012. Nelson recorded the largest increase in sales (+21 sales), followed by Auckland (+19 sales) and Waikato (+17 sales). Seven regions recorded decreases in sales volume with Canterbury recording the largest fall (-9 sales), followed by Southland (-7 sales) and Bay of Plenty and Otago together with three fewer sales. Compared to the three months ended December 2012 seven regions recorded an increase in sales, lead by Waikato (+14 sales).

“The supply of listings is barely able to keep up with demand,” says REINZ Rural Market Spokesman Brian Peacocke, “with demand for good quality properties outstripping supply. This situation is unlikely to change in the next few months as farmers begin to make commitments for the forthcoming season.”

“Northern parts of the country are seeing higher levels of activity on sheep and beef properties, whereas in the South Island the spotlight remains firmly on dairy. Demand for dairy support units is solid in the Canterbury region, but due to dry weather is soft in the Waikato. Viticulture demand remains buoyant in Marlborough where supply and demand are evenly matched.”

Grazing properties accounted for the largest number of sales with 44.1% share of all sales over the three months to January. Dairy properties accounted for 20.6%, Finishing properties accounted for 17.3% and Horticulture properties accounting for 9.0% of all sales. These four property types accounted for 91% of all sales during the three months ended January 2013.

Dairy FarmsDairy FarmsDairy Farms
For the three months ended January 2013 the median sales price per hectare for dairy farms was $35,530 (82 properties), compared to $34,483 for the three months ended December (63 properties), and $34,298 (58 properties) for the three months ended January 2012. The median dairy farm size for the three months ended January 2013 was 98 hectares.

Included in sales for the month of January were 25 dairy farms at a median sale value of $32,000 per hectare. The median farm size was 136 hectares with a range of 52 hectares in Waikato to 464 hectares in Hawkes Bay. The median production per hectare across all dairy farms sold in January 2013 was 1,047kgs of milk solids; the highest ever recorded median production in a calendar month.

The REINZ Dairy Farm Price Index fell by 0.9% in the three months to January compared to the three months to December, from 1,765.90 to 1,749.36. Compared to January 2012 the REINZ Dairy Farm Price Index fell by 8.0%. Further details on the REINZ Dairy Farm Price Index are set out below.

Finishing FarmsFinishing FarmsFinishing Farms
For the three months ended January 2013 the median sales price per hectare for finishing farms was $18,852 (69 properties), compared to $18,852 for the three months ended December (64 properties), and $21,080 (64 properties) for the three months ended January 2012. The median finishing farm size for the three months ended January 2013 was 78 hectares.

Grazing Farms Grazing Farms Grazing Farms
For the three months ended January 2013 the median sales price per hectare for grazing farms was $16,250 (176 properties) compared to $16,511 for the three months ended December (172 properties), and $13,601 (182 properties) for the three months ended January 2012. The median grazing farm size for the three months ended January 2013 was 68 hectares.

Horticulture FarmsHorticulture FarmsHorticulture Farms
For the three months ended January 2013 the median sales price per hectare for horticulture farms was $89,047 (36 properties) compared to $89,139 (34 properties) for the three months ended December, and $140,000 (17 properties) for the three months ended January 2012. The median horticulture farm size for the three months ended January 2013 was nine hectares.

Lifestyle PropertiesLifestyle PropertiesLifestyle Properties
The lifestyle property market saw a 22.2% (+273 sales) increase in sales volume in the three months to January 2013 compared to January 2012. 1,504 sales were recorded in the three months to January 2013 compared to 1,231 sales in the three months to January 2012. 114 fewer sales were recorded compared to the three months to December 2012 (-7.0%).

10 regions recorded increases in sales compared to January 2012 while three recorded decreases in sales. Auckland recorded the largest increase (+96 sales), followed by Waikato (+38 sales) and Wellington (+35 sales). Compared to December two regions recorded increases in sales with 11 regions recorded decreases. Gisborne recorded the largest increase in sales (+4 sales), followed by Nelson with one extra sale.

The national median price for lifestyle blocks rose by $8,500 (+1.7%) from $490,000 for the three months to December to $498,500 for the three months to January to reach a new record high. Compared to three months to January 2012 the median price rose by $28,500 (+6.1%).

The number of days to sell for lifestyle properties eased by one day, from 61 days for the three months to the end of December to 62 days for the three months to the end of January. Compared to the three months ended January 2012 the number of days to sell improved by 19 days from 81 days to 62 days. Southland recorded the shortest number of days to sell in January at 40 days, followed by Nelson at 44 days and Otago, Taranaki and Wellington at 49 days. West Coast recorded the longest number of days to sell at 230 days, followed by Bay of Plenty at 91 days and Hawkes Bay at 77 days.

Commenting on the lifestyle property market Brian Peacocke said, “Activity remains strong around Auckland, and steady across the rest of the North Island. In the South Island activity is healthy in Nelson and Canterbury but weaker in the lower South Island.”

REINZ All Farm Price Index – Additional DataREINZ All Farm Price Index – Additional DataREINZ 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 January 2013.

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 DataREINZ Dairy Farm Price Index – Additional DataREINZ 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 January 2013.

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.

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