Data released today by the Real Estate Institute of New Zealand (REINZ) shows there were 57 less farm sales (-13.6%) for the three months ended January 2020 than for the three months ended January 2019. Overall, there were 363 farm sales in the three months ended January 2020, compared to 345 farm sales for the three months ended December 2019 (+5.2%), and 420 farm sales for the three months ended January 2019. 1,277 farms were sold in the year to January 2020, 14.7% fewer than were sold in the year to January 2019, with 40.3% less Dairy farms, 3.9% less Grazing farms, 28.4% less Finishing farms and 9.8% less Arable farms sold over the same period.

The median price per hectare for all farms sold in the three months to January 2020 was $21,221 compared to $27,087 recorded for three months ended January 2019 (-21.7%). The median price per hectare decreased 7.7% compared to December 2019.

The REINZ All Farm Price Index fell 3.2% in the three months to January 2020 compared to the three months to December 2019. Compared to the three months ending January 2019 the REINZ All Farm Price Index fell 10.5%. 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.

Five of the 14 regions recorded an increase in the number of farm sales for the three months ended January 2020 compared to the three months ended January 2019 with the most notable being Auckland (+10) and Northland (+9). Waikato recorded the most substantial decline in sales (-32 sales) followed by Taranaki (-13 sales). Compared to the three months ended December 2019, eight regions recorded an increase in sales with the biggest increase being in Northland (+13), Waikato and Southland (both +5 sales).

Brian Peacocke, Rural Spokesman, at REINZ says: “Sales figures for the 3 month period ending January 2020 reflect the improving trend referred to last month but nevertheless are still 16% below the same period 12 months ago and 9% below the equivalent period 2 years ago.

“Volatility in the median price is the other notable factor with increases in the finishing and horticulture sectors, but decreases in the grazing and dairy sectors, particularly the latter.

“Numerous issues continue to impact the rural sector with the well-publicised restrictions emanating from some members of the banking sector now being trumped by market restrictions resulting from coronavirus to shortage of killing space at a critical time of the year to the onset of extraordinarily dry conditions bordering on drought throughout the North Island and the top of the South.

“The amazing contrast has been the heavy rain, cooler temperatures and flooding in the lower South Island.

“Again, as a regular occurrence, the resilience of the rural sector is being severely tested,” he concludes.

Points of Interest around New Zealand include:

• Northland/Auckland - a smattering of dairy activity at low prices in the upper North; a strong run of sales at moderate prices across a range of smaller to medium sized grazing properties; zero activity on finishing blocks in either region
• Waikato - several sales of dairy units at solid prices backed up by good sales of finishing properties at strong prices within the Hamilton, Morrinsville and Cambridge districts; no grazing sales and very quiet in the Taupo district
• Bay of Plenty/Rotorua - light activity albeit good prices in the finishing category but only one sale of a small avocado orchard in the horticulture sector
• Gisborne/Hawke’s Bay - activity in the Gisborne horticulture, finishing and grazing sectors with one significant sale of a larger station in the Matawai district; lighter activity further south apart from another significant station sale in the Wairoa district and a strong price for a cropping block west of Hastings
• Manawatu/Wanganui - a strong level of sales of grazing properties from Ruapehu district to Tararua, backed up by some strong prices for finishing properties in the Rangitikei and Horowhenua districts
• Wairarapa/Wellington - strong prices for two small finishing blocks in the Wairarapa but no activity in any other categories
• Nelson/Marlborough - generally quiet throughout the region apart from several moderately priced grazing blocks, one of which appears destined for forestry
• Canterbury/West Coast - good results at strong prices for finishing properties throughout the province supported by solid activity on grazing blocks but good strong sales of several arable blocks in the southern sector was a standout feature for the month; no sales of dairy units recorded for the last 5 months
• Otago – reasonable activity at steady to good prices for smaller finishing and grazing properties including one block destined or forestry; quiet on the dairy front
• Southland – a busy month in the lower South with a healthy level of sales at steady to solid prices for dairy and finishing properties, with lighter activity in the grazing sector inclusive of one deer farm sale

Grazing farms accounted for the largest number of sales with a 34% share of all sales over the three months to January 2020, Finishing farms accounted for 27%, Dairy accounted for 12% and Horticulture accounted for 7% of all sales. These four property types accounted for 80% of all sales during the three months ended January 2020.

Dairy Farms

For the three months ended January 2020, the median sales price per hectare for dairy farms was $35,967 (43 properties), compared to $38,152 (35 properties) for the three months ended December 2019, and $38,642 (69 properties) for the three months ended January 2019. The median price per hectare for dairy farms has decreased 6.9% over the past 12 months. The median dairy farm size for the three months ended January 2020 was 99 hectares.

On a price per kilo of milk solids basis the median sales price was $38.72 per kg of milk solids for the three months ended January 2020, compared to $41.40 per kg of milk solids for the three months ended December 2019 (-6.5%), and $40.28 per kg of milk solids for the three months ended January 2019 (-3.9%).

The REINZ Dairy Farm Price Index fell 15.7% in the three months to January 2020 compared to the three months to December 2019. Compared to January 2019, the REINZ Dairy Farm Price Index fell 15.9%. 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 2020, the median sale price per hectare for finishing farms was $30,032 (98 properties), compared to $31,008 (90 properties) for the three months ended December 2019, and $29,587 (136 properties) for the three months ended January 2019. The median price per hectare for finishing farms has risen 1.5% over the past 12 months. The median finishing farm size for the three months ended January 2020 was 36 hectares.

Grazing Farms

For the three months ended January 2020, the median sales price per hectare for grazing farms was $9,910 (125 properties), compared to $10,177 (119 properties) for the three months ended December 2019 and $10,295 (118 properties) for the three months ended January 2019. The median price per hectare for grazing farms has fallen 3.7% over the past 12 months. The median grazing farm size for the three months ended January 2020 was 155 hectares.

Horticulture Farms

For the three months ended January 2020, the median sales price per hectare for horticulture farms was $283,807 (24 properties), compared to $261,131 (31 properties) for the three months ended December 2019 and $160,618 (41 properties) for the three months ended January 2019. The median price per hectare for horticulture farms has risen 76.7% over the past 12 months. The median horticulture farm size for the three months ended January 2020 was 6 hectares.

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