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Deteriorating Conditions Impacting On Farm Sales


News Release 19 March 2013

Deteriorating Conditions Impacting On Farm Sales

Summary

Data released today by the Real Estate Institute of NZ (“REINZ”) shows there were 28 more farm sales (+8.0%) for the three months ended February 2013 than for the three months ended February 2012. Overall, there were 379 farm sales in the three months to end of February 2013, compared with 399 farm sales in the three months to January 2013, a decrease of 20 sales (-5.0%). 1,445 farms were sold in the year to February 2013, 11.6% more than were sold in the year to February 2012.

The median price per hectare for all farms sold in the three months to February 2013 was $21,951; a 1.43% increase on the $21,641 recorded for three months ended February 2012. The median price per hectare decreased by 8.5% compared to January.

The REINZ All Farm Price Index eased by 3.3% in the three months to February compared to the three months to January, from 3,039.77 to 2939.42. Compared to February 2012 the REINZ All Farm Price Index fell by 9.0%. 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 February 2013 compared to the three months ended February 2012. Auckland recorded the largest increase in sales (+17 sales), followed by Nelson (+16 sales) and Waikato (+11 sales). Seven regions recorded decreases in sales volume with Canterbury recording the largest fall (-16 sales), followed by Manawatu/Wanganui (-5 sales) and Southland (-3 sales). Compared to the three months ended January 2013 six regions recorded an increase in sales, lead by Southland (+4 sales).

“In spite of climatic conditions affecting the greater part of the North Island, there has been good demand for dairy units throughout the country, particularly for well irrigated properties in Canterbury,” says REINZ Rural Market Spokesman Brian Peacocke.”

“There has been steady activity for hill country sheep and beef units in Taranaki and Gisborne, although heavy reductions in income are predicted for the pastoral farming sector due to falling schedules. Increasing activity in the Bay of Plenty reflects a quiet re-emergence of optimism in the kiwifruit sector.”

Grazing properties accounted for the largest number of sales with 44.6% share of all sales over the three months to February. Dairy properties accounted for 20.3%, Finishing properties accounted for 18.7% and Horticulture properties accounted for 7.9% of all sales. These four property types accounted for 91.6% of all sales during the three months ended February 2013.

Dairy Farms
For the three months ended February 2013 the median sales price per hectare for dairy farms was $33,254 (77 properties), compared to $35,530 for the three months ended January (82 properties), and $34,223 (61 properties) for the three months ended February 2012. The median dairy farm size for the three months ended February 2013 was 100 hectares.

Included in sales for the month of January were 17 dairy farms at a median sale value of $35,487 per hectare. The median farm size was 119 hectares with a range of 41 hectares in Taranaki to 260 hectares in Southland. The median production per hectare across all dairy farms sold in February 2013 was 792kgs of milk solids.

The REINZ Dairy Farm Price Index fell by 1.6% in the three months to February compared to the three months to January, from 1,749.36 to 1,722.22. Compared to February 2012 the REINZ Dairy Farm Price Index fell by 9.3%. Further details on the REINZ Dairy Farm Price Index are set out below.

Finishing Farms
For the three months ended February 2013 the median sales price per hectare for finishing farms was $19,029 (71 properties), compared to $18,852 for the three months ended January (69 properties), and $22,203 (66 properties) for the three months ended February 2012. The median finishing farm size for the three months ended February 2013 was 75 hectares.

Grazing Farms
For the three months ended February 2013 the median sales price per hectare for grazing farms was $12,900 (169 properties) compared to $16,250 for the three months ended January (176 properties), and $14,880 (180 properties) for the three months ended February 2012. The median grazing farm size for the three months ended February 2013 was 70 hectares.

Horticulture Farms
For the three months ended February 2013 the median sales price per hectare for horticulture farms was $118,371 (30 properties) compared to $89,047 (36 properties) for the three months ended January, and $202,500 (14 properties) for the three months ended February 2012. The median horticulture farm size for the three months ended January 2013 was eight hectares.

Lifestyle Properties
The lifestyle property market saw a 12.9% (+160 sales) increase in sales volume in the three months to February 2013 compared to February 2012. 1,403 sales were recorded in the three months to February 2013 compared to 1,243 sales in the three months to February 2012. 101 fewer sales were recorded compared to the three months to January 2013 (-6.7%).

10 regions recorded increases in sales compared to February 2012 while four recorded decreases in sales. Auckland recorded the largest increase (+85 sales), followed by Canterbury (+26 sales) and Waikato (+24 sales). Compared to January four regions recorded increases in sales with 10 regions recorded decreases. Taranaki recorded the largest increase in sales (+5 sales), followed by Canterbury and West Coast with four extra sales each.

The national median price for lifestyle blocks rose by $30,000 (+6.4) from $465,000 for the three months to February 2012 to $495,000 for the three months to February 2013. The national median price for lifestyle blocks is just $3,500 below the record high reached in January 2013.

The number of days to sell for lifestyle properties eased by six day, from 62 days for the three months to the end of January to 68 days for the three months to the end of February. Compared to the three months ended February 2012 the number of days to sell improved by 10 days from 78 days to 68 days. Southland recorded the shortest number of days to sell in February at 39 days, followed by Taranaki at 46 days and Wellington at 49 days. West Coast recorded the longest number of days to sell at 230 days, followed by Bay of Plenty at 97 days and Northland at 88 days.

Commenting on the lifestyle property market Brian Peacocke said, “Sales activity was strong around the major centres, but steady to slow in the smaller regional areas with prices rising closest to Auckland and reducing further away from the city. There was also good activity in the Waikato, with Auckland buyers active in areas north of Hamilton.”

“In Canterbury areas north of Christchurch and Mid Canterbury are seeing solid increases in buyer interest with a corresponding rise in the number of listings.”

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 February 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.


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 February 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.


Click for big version.


Click here to view: REINZ_Rural_Market_Statistics__February_2013.pdf

--
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 July refer to the period from 1 December 2012 to 28 February 2013.
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.

ENDS

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