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Energy-Saving Early Spring Market

Energy-Saving Early Spring Market


Data released today by the Real Estate Institute of New Zealand (REINZ) shows there were 3 less farm sales (+1.1%) for the three months ended October 2019 than for the three months ended October 2018. Overall, there were 260 farm sales in the three months ended October 2019, compared to 270 farm sales for the three months ended September 2019 (-3.7%), and 263 farm sales for the three months ended October 2018. 1,336 farms were sold in the year to October 2019, 9.4% fewer than were sold in the year to October 2018, with 36.0% less Dairy farms, 3.7% less Grazing farms, 13.6% less Finishing farms and 7.0% more Arable farms sold over the same period.

The median price per hectare for all farms sold in the three months to October 2019 was $25,637 compared to $27,121 recorded for three months ended October 2018 (-5.5%). The median price per hectare decreased 0.5% compared to September 2019.

The REINZ All Farm Price Index fell 1.2% in the three months to October 2019 compared to the three months to September 2019. Compared to October 2018 the REINZ All Farm Price Index rose 0.8%. 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 October 2019 compared to the three months ended October 2018 with the most notable being Manawatu/Wanganui (+14) and Bay of Plenty (+12). Southland recorded the most substantial decline in sales (-13 sales) followed by Waikato (-7 sales). Compared to the three months ended September 2019, five regions recorded an increase in sales with the biggest increase being in Canterbury (+8) and Manawatu/Wanganui (+7 sales).

Brian Peacocke, Rural Spokesman, at REINZ says: “Sales volumes for the 3 month period ending October 2019 confirm dairy farm sales are consistent with the equivalent period for the last 2 years, but are well down on the same period in 2017 (11 vs 20). Finishing property sales are down considerably, grazing and horticultural sales have slowed to a lesser degree, but the stand-out category is arable, which is comfortably ahead of 2 years ago and almost double compared to the equivalent period 12 months ago (28 vs 15).

The relatively good spring conditions throughout much of the country are cause for quiet satisfaction for those who have either increased production or are achieving good increases in weights for lamb and beef.

In spite of such factors, there appears to be a mood of frustration and even anger throughout the rural sector at the advancement of one government-promoted fresh water policy after another, to the consternation of cost-impacted recipients, and those within the forestry-impacted pastoral sector are venting feelings with vibrant messages and emotive action directed strongly towards the occupants of the Beehive.

Sheltering behind such issues is the dark elephant in the room – the banking industry, which surprisingly in view of the extremely low interest rates, is less than subtly erecting barriers to frustrate rural borrowers, and in the process risking a potential major drop in farm values as increasing numbers of land owners seek to exit the industry.

Points of Interest around New Zealand include:

Upper North - no dairy farm sales recorded for the last 4 months throughout Northland and Auckland; a distinct easing in volumes of finishing and grazing property sales and then only smaller blocks; minimal activity in the horticulture and arable sectors

Central Regions - very light activity in the dairy sector throughout the Waikato, King Country and Bay of Plenty regions apart from one strong sale of a multi-titled unit east of Hamilton and another strongly priced sale at Edgecombe for a larger dairy unit destined for kiwifruit conversion; virtually no activity in the finishing and grazing sectors but
Eastern North Island - light results in Gisborne and Hawke’s Bay in the finishing and grazing categories where drier conditions are becoming evident; a smattering of activity in the Wairarapa and Wellington regions but solid sales of grazing units in the Tararua district

Western North Island - one small dairy farm sale in Taranaki, the first for 5 months; good steady results in the finishing, grazing and dairy support sectors throughout Manawatu/Wanganui albeit a number of those were smaller properties

Upper South Island - moderate results in the viticulture sector in Marlborough but zero activity in the Nelson/Tasman districts during October

Central South Island - quiet on the dairy front throughout Canterbury and the West Coast but strong results in the finishing, grazing and arable sectors throughout the Canterbury province, particularly so in the Ashburton and Timaru districts where several arable properties sold very well

Lower South Island - very quiet in the dairy sector throughout Otago and Southland but a continuation of steady sales of smaller grazing units in Central Otago; reasonable results in Southland also with a steady level of sales of dairy support, grazing and arable properties.

Grazing farms accounted for the largest number of sales with a 33% share of all sales over the three months to October 2019, Finishing farms accounted for 24%, Horticulture accounted for 17%, and Arable properties accounted for 11% of all sales. These four property types accounted for 85% of all sales during the three months ended October 2019.

Dairy Farms

For the three months ended October 2019, the median sales price per hectare for dairy farms was $41,204 (11 properties), compared to $38,102 (10 properties) for the three months ended September 2019, and $28,555 (11 properties) for the three months ended October 2018. The median price per hectare for dairy farms has increased 44.3% over the past 12 months. The median dairy farm size for the three months ended October 2019 was 108 hectares.

On a price per kilo of milk solids basis the median sales price was $44.71 per kg of milk solids for the three months ended October 2019, compared to $31.06 per kg of milk solids for the three months ended September 2019 (+44.0%), and $30.59 per kg of milk solids for the three months ended October 2018 (+46.2%).

The REINZ Dairy Farm Price Index rose 5.9% in the three months to October 2019 compared to the three months to September 2019. Compared to October 2018, the REINZ Dairy Farm Price Index rose 36.1%. 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 October 2019, the median sale price per hectare for finishing farms was $34,553 (62 properties), compared to $33,643 (74 properties) for the three months ended September 2019, and $32,969 (77 properties) for the three months ended October 2018. The median price per hectare for finishing farms has risen 4.8% over the past 12 months. The median finishing farm size for the three months ended October 2019 was 33 hectares.

Grazing Farms

For the three months ended October 2019, the median sales price per hectare for grazing farms was $10,410 (86 properties), compared to $11,090 (94 properties) for the three months ended September 2019 and $11,335 (90 properties) for the three months ended October 2018. The median price per hectare for grazing farms has fallen 8.2% over the past 12 months. The median grazing farm size for the three months ended October 2019 was 82 hectares.

Horticulture Farms

For the three months ended October 2019, the median sales price per hectare for horticulture farms was $216,383 (44 properties), compared to $212,985 (45 properties) for the three months ended September 2019 and $198,768 (49 properties) for the three months ended October 2018. The median price per hectare for horticulture farms has risen 8.9% over the past 12 months. The median horticulture farm size for the three months ended October 2019 was 7 hectares.

ENDS

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