NZ farm sales pick up in November, prices fall
Dec. 16 (BusinessDesk) – New Zealand farm sales picked up from a slump in October, though prices continued to decline.
The number of farm sales rose to 170 in the three months ended Nov. 30, according to Real Estate Institute data. That’s up from 147 in the three months through October, though still down on the 223 sales in the same period a year ago.
Prices continued to decline, with the median sales price dropping 1.9% to $950,000 from a month earlier. That’s still some 10% more than the same period in 2009. The media price dropped in six out of 14 districts.
“After a very quiet period there is now a higher level of genuine inquiry and increased activity in the rural market resulting in the lift in sales, but that is to be expected at this time of year,” spokesman Bryan Thomson said in a statement. “While there is plenty of investigation going on, both sellers and buyers are still coming to terms with the changes in price levels and taking time to make their decisions.”
Farm sales have hit a downturn in recent months as banks are unwilling to fund the purchase of rural real estate in the current economic climate, though existing farmers are using weak exchange rate against the Australian dollar to repay outstanding debt.
Farm prices have been on the decline over the past two years after the global financial crisis choked up farmers’ ability to raise cash to expand their business. Reserve Bank Governor Alan Bollard is expecting farmers to ramp up spending once they’ve repaid their outstanding debts.