Northland dairy farms selling out en-masse to cash-rich ‘out-of-towners’
Selling Northland nationwide – the regions ‘cheap’ dairy farms are being snapped up by ‘out-of-town’ buyers from regions where their land is more highly valued.
The dynamics of dairy farming in Northland are undergoing the biggest shake-up the sector has seen in more than 50 years – with a wave of ‘out-of-towners’ coming into the region to take advantage of the comparatively cheap land on offer.
In the past 18 months, $20 million dollars of Northland dairy farms have been sold to Waikato, King Country, Taranaki, Canterbury, and Westland farmers moving into the province. The sales were brokered by real estate agency Bayleys – which is now looking to accelerate the trend this year.
Among the Northland dairy farming units which changed hands to ‘out-of-towners’ in the past year were:
• A 292 hectare Pouto dairy farm milking almost 600 cows which sold to Taranaki buyers for $3.7 million
• A 370 hectare Ruawai dairy farm producing 220,000 kilogrammes of milk solids bought by a Canterbury farmer for $7.3 million
• A 283 hectare mixed use beef and dairying unit at Matakohe bought by a Canterbury farmer for $2.7 million
• An 80 hectare Ruawai dairying unit sold to a Canterbury farmer for $2.8 million
• Whangarei and Maungaturoto farms sold to buyers from the Waikato
• A 425 hectare Aranga farm sold to a King Country buyer for $2. 7million
• A 285 hectare Dargaville dairying unit sold to a buyer from the West Coast of the South Island for $1.33 million
More than of half the properties which sold were taken on a national ‘roadshow’ by Bayleys last year – with copies of a portfolio showcasing the farms presented at seven industry seminars.
The company is now replicating the Northland Dairy Expo this spring – with expectations that an even greater number of the province’s farms will be bought by ‘out-of-towners’.
Bayleys’ Northland rural manager Tony Grindle said the company was looking to take more than a dozen Northland dairy farms on an expo’ designed to showcase the very best of Northland dairy units through a week-long road show encompassing Hamilton, New Plymouth, Palmerston North and Auckland.
“The motivation is simply about the economics of dairy farming – and the price of quality primary productive land in Northland compared to most other parts of the country,” Mr Grindle said.
“Last year we took 11 Northland dairy units on the roadshow... and all of those available sold.
So it was a proverbial ‘no brainer’ to do it again this year. The word is certainly out in the rural market about what we did.
“We’ve been out in the marketplace for a couple of months now talking about the roadshow, and we’ve noted a stronger interest and commitment from Northland farmers wanting to be a part of the campaign and promote their properties to buyers from these traditional dairying areas.
“With the support of Bayleys’ nationwide network, we are able to gain penetration into the more traditional dairy farming areas and ensure our vendors’ farms are put in front of quality prospective purchasers who may see a premium in the Northland land values.
“While traditional marketing of any productive rural units should of course start with canvassing the immediate locality, the dynamics for diary farming have changed significantly - meaning the potential buyer pool is now nationwide.”
Mr Grindle said that as a generalisation, most young Northland farmers wanting to get into the dairying sector simply didn’t have the comparable “financial muscle” being brought to the region by out-of-town buyers who were selling up their high-value units in New Zealand’s most productive pastoral zones.
Latest figures from the Real Estate Institute of New Zealand show the average cost per hectare of dairy farms in Northland was $15,555 per hectare. By comparison, the REINZ figures show the average cost per hectare of dairy farms in the Waikato was $49,000, while in Taranaki it was as high as $55,000 per hectare.
Mr Grindle said there were a number of reasons why Northland farmers had chosen now as a good time to exit the market – ranging from the drop in Fonterra’s forecast milk solids payout for the 2024/15 financial year, and a lack of succession planning for some ‘older’ farmers looking to retire, through to the second consecutive dry season for those in the western coastal region.
“As well as it just being the right time for those individuals and families that have been weighing up their options for the past few seasons,” he said.