The rural property market is going through a "significant downturn," according to the Real Estate Institute of New Zealand.
It recorded just 243 farm sales throughout the country over the three months to the end of May this year, down 9.3% compared to the same period of last year, and down 43% compared to the same period of 2022.
On an annual basis, 951 farms of all types were sold over the 12 months to May this year, down 20% compared to the previous 12 months.
The biggest annual decline in sales was for grazing properties -34%, followed by dairy farms -26%, dairy support farms -24% and arable farms -14%.
Prices are also declining, with all farms sold in the three months to May achieving a median price per hectare of $26,915, down 2.8% compared to the same period of last year.
The REINZ All Farm Price Index, which adjusts for differences in the mix of farm sold each month by farm type, size and location, was down 13% in May compared to May last year.
Dairy farm sales recorded a modest annual increase of 1.2% in their median price per hectare which was $35,135 over the three months to May this year. However, that was likely due to a change in the mix of properties sold, because the REINZ Dairy Farm Price index, which adjusts for changes in the mix of farms sold by size and location, was down 17% compared to a year earlier.
That reflected an 18% drop in the price per kilo of milk solids to $30.45.
Finishing farm sales achieved a median price per hectare of $32,830, down 12% for the year, while grazing farms sold for a median price per hectare of $13,880, down 2.6% for the year.
The biggest decline in prices was for horticultural properties, which sold for a median price per hectare of $300,000, down 23% on the same period of last year.
However while farms sales continue to decline, there are signs that lifestyle block sales may be bottoming out after three years of substantial declines.
The REINZ recorded 1449 lifestyle block sales in the three months to May this year, compared to 1386 in the three months to May last year, 1795 in the three months to May 2022 and 2548 in the three months to May 2021.
The median price of all lifestyle blocks sold in the three months to May this year was $1 million, unchanged from a year earlier.
26 Comments
Time to buy productive dirt?
Or more eye watering losses to come‽
Been looking at some myself, roads leading to them are absolute shockers though......water washout related, potholes you could lose your dog in.
I believe infrastructure will be NZs archillies heal from here on.
Is their real, future hope on this front?
Ultimately, who's going to devote their share of energy to those roads...better hope your productive.
You could always buy closer to town?.... oh wait..
Western BOP, Te Puna etc;
HAIL Site Viewer (boprc.govt.nz)
Yes - the Hi-cane debacle is a classic case highlighting why the current economic model does not and cannot fit with the health of the land and its people.
To qualify as a residential site these contaminates must be kept within limits, these residential limits allow you to consume only 10% of your daily produce from said site.
Yes exactly. Know some who clicked "CRAZY PRICE BUYNOW" to go from suburban Auck to rural overpriced Auck or further afield.
The earnings related balloon is now hissing fast, as the values correct to where earnings support this amply available Lifestylers land.
This hissing balloon has a long way, to still deflate.
Lessons on "earnings backed economics" is being felt in Realtime.
Spruikers will of course tell us "other factors, waffle, word salads" why values will stay aloft. Idiots, all of them.
Good equestrian properties around Auckland are still getting eye watering prices, because life is short, some still have lots of dosh, and people are prepared to pay for ready now... I get it, many girls only ride from 10-17 years old then off to UNI etc, so time is short.
https://www.trademe.co.nz/a/property/residential/sale/auckland/rodney/r…
is this what you are building in Riverhead wingnut?
It takes about 24 months from initial planning to get a decent equestrian area, stables etc installed, so many would rather buy a ready now property, life is short for those with money. There are not a lot around, especially decent larger areans with lighting so you can ride after 5pm in winter.
Often there will be a 3-400k horse truck parked in the truck shed..... Flying High, its a different world mate, many of these people where on the receiving end of some very large handouts during covid.... There is also a shortage of good dressage horses, the ladies love them. The breeding paused over Covid so there is now a shortage of younger horses coming through.
I know that some are doing it tough, but there are also people in NZ who have made a fortune out of property and are flush.
There is also a lot of crap rural out there, rundown, crap fencing, down the end of a dirt road, though some really like the seclusion. If you want cheap you can find it.
I sold a property that was perfect for the horsey set. It was the agent's idea. I grazed calves on it for fun, but he marketed it to the equestrians
It had great electric fencing, a bore, a shed, yards, good driveway, big house, a separate gate for access to the paddocks, and all the paddocks could be viewed from the house. We got $600k more than we thought we would. Top agent, sold 2 properties for me over the last couple of years.
Going forward China is helping BRICS nations and African countries develop much more productive farms, partly with very cheap and accessible farm equipment replacing hand tools. And given that China is no longer keen to buy from nations hostile to it, our farmers may find that market increasingly less lucrative over time as China gains new suppliers.
The BRICS.....a bunch of dictators, tyrants and failed states. Maybe it could be the BRINCS, with the addition of the world's biggest prison camp...North Korea.
Brazil, South Africa and Russia....you gotta be joking. Different races, different languages, different religions and they don't even like each other. And Russia invading Ukraine.
A good point.
I'm pretty sure very, very few Kiwis have done the math on the absolutely friggin' enormous potential for food production Africa has. I'd not be too far off if I said Africa could feed the world with adequate capital investment.
At this point the inquisitive will be asking, so why haven't they done this? And at this point I'd suggest they have look at doing some excellent papers in Economic History on the subject. Sadly, it's not a happy study. More so when one sees the outsized political influence rich land owners in non-African countries have.
A lot of Africa now effectively has a mortgage with the Govt of China. PRC owns their arse.
So as you say, when an efficient, new, cutthroat Chinese businessman is welcomed in, to farm the arable lands of Africa, with efficient machinery, trained and disciplined labour.......they would outcompete us, hands down.
- God defend NZ, when this happens.
Much like what happened to Detroit, when the Euro/Jap cars won the efficiency race.
Yes Maccas are smart real estate business buyers!
How the hell did they find an unused, high mound of dirt in the Kumeu? that's not in the FLOOD ZONE ?
The traffic there is stuffed and maybe they figure that captured motorists will buy a burger and chips? A happy meal will make the Unhappy Traffic issues go away? Not really.
If they did find that elusive Unfloddy ground in Kumeu? good property buy?
There's a brand new building on the way up in Kumeu and pretty sure Maccas is going to be in it. They wouldn't have commenced construction a few months ago if it was in the flood zone. The flood zone's quite small, I live not too far from there.
Maccas has a market cap of US$184 billion....they don't make too many mistakes.
I've told ya before, the Kumeu/Riverhead/Westgate golden triangle is blasting off, and this is just another clue. Heaps of kiwis are obsessed with flooding and the global warming BS. Smart people will take advantage of this gullibility.
https://www.oneroof.co.nz/news/are-big-macs-a-shortcut-to-property-weal…
What did I tell ya folks? I know exactly where the flood zones are, and they're miniscule. The flooding in Henderson for example, isn't because of global warming, it's because the houses were built close to a river which is now receiving a colossal amount of water from new subdivisions. Not exactly brain surgery.
Insurance companies are taking advantage so they can gouge the public. There's some huge flooding in the valley below my house a few times a year, but it's not 'global warming'. It's because the Council hasn't cleaned the river out and there's lots of new houses pouring their roof water into it.
I watched a greenie being carted off by the police on tv a few weeks back. He yelled out..."you'll all be dead in 10 years time"....f there's some dupes out there.
Lots of places in Auck general, Kumeu, Riverhead have the light blue or dark blue council Flood overlay - over the properties.
I know Banks won't lend on these places or will require massive deposits and insurance guarantees. Most people should just walk away, it will be too hard and too risky.
These places have and will plummet much more than this general current property crash does nationally, once it possibly bottoms out by 2026/2028.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.