Rural Market: And Spring Rolls into Summer

News Release 18 February 2015

And Spring Rolls into Summer

Summary

Data released today by the Real Estate Institute of NZ (“REINZ”) shows there were 109 fewer farm sales (-19.3%) for the three months ended January 2015 than for the three months ended January 2014. Overall, there were 455 farm sales in the three months to end of January 2015, compared to 486 farm sales for the three months ended December 2014 (-6.4%) and 564 farm sales for the three months to the end of January 2014. 1,811 farms were sold in the year to January 2015, 1.0% more than were sold in the year to January 2014.

The median price per hectare for all farms sold in the three months to January 2015 was $27,997 compared to $22,664 recorded for three months ended January 2014 (+23.6%). The median price per hectare fell 2.7% compared to December.

The REINZ All Farm Price Index rose 0.9% in the three months to January compared to the three months to December, moving from 3,249.8 to 3,278.5. Compared to January 2014 the REINZ All Farm Price Index fell by 1.6%. 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.

Six regions recorded increases in sales volume for the three months ended January 2015 compared to the three months ended January 2014. Auckland recorded the largest increase in sales (+13 sales), followed by Bay Of Plenty (+7 sales). Compared to the three months ended December 2014, three regions recorded an increase in sales.

“The buoyancy of the spring was replaced by the traditional summer holiday season, when as expected sales activity slowed considerably for several weeks”, says REINZ Rural Spokesman Brian Peacocke.

“Sales volumes for the three months ended January 2015 reflects the above, with January figures reduced dramatically, in excess of 50% in some categories, compared to very strong sales figures recently achieved, particularly in December 2014”

Highlights Include:
• A surprisingly strong market in Northland with continuity coming from first farm purchases;
• Steady activity throughout the Waikato, values fully firm and good sales activity with grazing properties, but heavily reduced sales volumes of dairy farms;
• An ongoing and very strong market for kiwifruit properties in the Bay of Plenty, with sale prices for gold and green orchards close to the record levels of the pre-PSA era;
• A quieter market in most categories for the remaining North Island regions; and
• Holidays, harvesting and the lack of rain have been the dominant factors throughout much of the South Island where values remain firm in what could be described as a quiet market overall.

Grazing properties accounted for the largest number of sales with 44.2% share of all sales over the three months to January 2015, Dairy properties accounted for 22.2%, Finishing properties accounted for 13.2% and Horticulture properties accounted for 11.2% of all sales. These four property types accounted for 90.8% of all sales during the three months ended January 2015.

Dairy Farms
For the three months ended January 2015 the median sales price per hectare for dairy farms was $40,742 (101 properties), compared to $41,227 (95 properties), for the three months ended December 2014and $36,509 (127 properties) for the three months ended January 2014. The median dairy farm size for the three months ended January 2014 was 112 hectares.

Included in sales for the month of January were 15 dairy farms at a median sale value of $32,501 per hectare. The median farm size was 139 hectares with a range of 52 hectares in Waikato to 262 hectares in Northland. The median production per hectare across all dairy farms sold in January 2015 was 1,097 kgs of milk solids, the third highest on record.

The REINZ Dairy Farm Price Index fell by 8.6% in the three months to January compared to the three months to December, from 2,157.6 to 1,971.0. Compared to January 2014, the REINZ Dairy Farm Price Index rose by 4.5%. The REINZ Dairy Farm Price Index adjusts for differences in farm size and location compared to the median price per hectare, which does not adjust for these factors.

Finishing Farms
For the three months ended January 2015 the median sale price per hectare for finishing farms was $23,506 (60 properties), compared to $24,043 (65 properties), for the three months ended December 2014 and $20,720 (119 properties) for the three months ended January 2014. The median finishing farm size for the three months ended January 2015 was 58 hectares.
Grazing Farms
For the three months ended January 2015 the median sales price per hectare for grazing farms was $15,640 (201 properties) compared to $16,167(219 properties), for the three months ended December 2014 and $13,995 (238 properties) for the three months ended January 2014. The median grazing farm size for the three months ended January 2015 was 81 hectares.

Horticulture Farms
For the three months ended January 2015 the median sales price per hectare for horticulture farms was $205,634 (51 properties) compared to $202,308 (54 properties) for the three months ended December 2014, and $132,474 (36 properties) for the three months ended January 2014. The median horticulture farm size for the three months ended January 2015 was six hectares.

Lifestyle Properties
The lifestyle property market saw a 5.4% lift (+84 sales) in sales volume in the three months to January 2015 compared to January 2014. 1,623 sales were recorded in the three months to January 2015 compared to 1,539 sales in the three months to January 2014. 146 fewer sales were recorded compared to the three months to December 2014 (-8.2%). For the 12 months to January 2015 there were 6,417 unconditional sales of lifestyle properties, a decrease of 3.2% (-214 sales) over the 12 months to January 2014.

Eight regions recorded an increase in sales compared to January 2014 while six recorded decreases in sales. Compared to December 2014, two regions recorded an increase in sales with 12 regions recording decreases.

The national median price for lifestyle blocks fell by $6,000 (-1.1%) from $535,000 for the three months to January 2014 to $529,000 for the three months to January 2015. The median price for lifestyle blocks in Auckland rose by $115,000 (+13.5%) from $850,000 for the three months to January 2014 to $965,000 for the three months to January 2015, a new record median price for the region. Over the same time period, the median price fell by 12.6% in Waikato to $455,000 and rose by 1.3% in Canterbury to $607,500. Compared to December 2014, the national median sales price rose by $4,000 (+0.8%).

The median number of days to sell for lifestyle properties improved by two days, from 60 days for the three months to the end of December 2014 to 58 days for the three months to the end of January 2015. Compared to the three months ended January 2014 the median number of days to sell also improved by two days from 60 days to 58 days. Gisborne recorded the shortest number of days to sell in January 2015 at 37 days, followed by Southland at 38 days and Taranaki at 44 days. West Coast recorded the longest number of days to sell at 164 days, followed by Northland at 99 days, with Hawkes Bay at 85 days.

Commenting on the lifestyle property market Brian Peacocke said, “Sales volumes for the three month period ending January for most regions were down substantially compared to the December three month period.”

Highlights Include:
• Auckland continues to be the ‘hot spot’ with a record median price for the three month period;
• Waikato volumes in January were well down in a market notable for Auckland based enquiry, but local purchasers;
• Reduced volumes in the Bay of Plenty but a consistently solid median price of $520,000;
• Steady sales volumes in the Manawatu/Wanganui and Wellington regions with solid medians of $490,000 and $420,000 respectively;
• Steady prices in Nelson on reduced volumes; and
• Quiet market conditions in Canterbury, Otago and Southland with distinctly reduced volumes, offset by a notable increase in the median price for Canterbury.

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 January 2015.

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.

Click for big version.

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 January 2015.

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.

Click for big version.

----- ENDS -----

Real Estate Institute of New Zealand
For more real estate information and market trends data, visit www.reinz.co.nz. For New Zealand's most comprehensive range of listings for residential, lifestyle, rural, commercial, investment and rental properties, visit www.realestate.co.nz - REINZ's official property directory website.
Editors Note:
The information provided by REINZ in relation to the rural real estate market covers the most recently completed three month period; thus references to September refer to the period from 1 November 2014 to 31 January 2015.
The REINZ Farm Price Indices have been developed in conjunction with the Reserve Bank of New Zealand. It adjusts sale prices for property specific factors such as location, size and farm type which can affect the median $/hectare calculations and provides a more accurate measure of farm price movements. The REINZ Farm Price Indices has been calculated with a base of 1,000 for the three months ended March 1996. The REINZ Farm Price Indices is best utilised in assessing percentage changes over various time periods rather than trying to apply changes in the REINZ Farm Price Index to specific property transactions.

Attached: REINZ_Rural_Market_Report__January_2015.pdf

© Scoop Media