The rural property slump continued in October with declining sales numbers and prices.
The latest rural property figures from the Real Estate Institute of New Zealand show sales of both farms and lifestyle blocks continued to decline in October.
The REINZ recorded 156 farm sales of all types in the three months to the end of October, down 20% compared to October last year.
Farm sales have been in steady decline for the last three years. In the three months to the end of October sales numbers were down 42% compared to the same period of 2020 - see graph below.
However sales continue to follow the usual seasonal trends, albeit at progressively lower levels, so sales numbers should start to pick up over the summer months.
Prices are also softer, with the REINZ All Farm Price Index, which accounts for differences in the mix of farms sold by size, type and location, down 8.7% over the three months to October compared to a year earlier.
The REINZ Diary Farm Price Index, which adjusts for differences in the mix of dairy farms sold by size and location, was down 12.5% over the three months to October compared to a year earlier.
It's a similar story for the lifestyle block market, with the REINZ recording 1175 lifestyle block sales in the three months to October, down 11.9% compared to the same period of last year.
Lifestyle block sales have also been in steady decline for the last three years. Sales over the three months to the end of October were down 32% compared to the same period of 2020 - see second graph below.
The median price for lifestyle properties sold in the three months to October this year was $927,000, down by $87,000 (-8.6%) compared to the same period of last year.
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11 Comments
Perhaps people are getting wise to the nature of "life-sentence" blocks, you have to LOVE gardening to make it work.
If you're on the outskirts of Hamilton a lifestyle property is a often mcmansion with a tennis court and pool that no one uses and a lawn that requires a john deere.
In regional NZ it might be a quant house with orchards, gardens, bush and birds.. and deer. All edible.
I expect the mcmansions are the ones suffering.
Or one has to learn to accept that one cannot beat nature, and embrace a bit of chaos.
Lifestyle block is too broad a category. I have a neighbour who is technically a LSB but his land is 0.8Ha in total and is little more than a large house on a massive lawn with a single miserable calf being grazed in a 0.1Ha "paddock." I hear people talking about 50Ha blocks as LSBs but they're mostly covered in native bush. I have another neighbour with 8Ha and he grazes dozens of cattle at a time, making a decent return, but he's an ex-farmer who runs the place like clockwork. It would be nice if the LSB category could be stratified somehow, like urban properties.
But I agree, anyone moving onto a LSB and expecting everything to be neat and tidy all the time with minimal effort (and/or at minimal cost) is delusional.
(Disclosure: My property is rural industry, LSB-adjacent.)
All true. Also true is that you shouldn’t move to a lifestyle block if you’re afraid of hard work.
Now that the panic to flee covid riddled cities and access to 2% debt have subsided, this was always going to happen.
Popcorn.
After living the bulk of ones working life negotiating traffic jams and juggling shopping and school runs, going country becomes a very attractive escape in ones later years. If that city house cannot be palmed off at a yesteryear price, it stands to reason the life style block sector like clockwork had to implode.
Plus, people find out that they have bought a property bigger than they can handle, internet access can be slow and unreliable - and being close to a hospital can quickly go up the list of priorities as health deteriorates.
Life is simply about choices. Rural living is a wonderful lifestyle when the balance is right. Carrying too much debt, in any situation, brings its pressures and challenges. Having space, no close neighbours but ones who are on the same page and co-operate and share things rural is a great place to be. Being food self-sufficient, in meat, vegetables and fruit and being able to produce a net taxable income, outside of other income streams, is awesome. Kids on motorbikes and horses, grandkids floating about, (without their devices) helping where they can is gold ! You get out of life what you put into it 👍
Why don't you graph the median prices over the last three years - that would be a much more interesting graph...
The past 12 months the farm price has eased, a well documented drop in forestry interest and lower dairy, beef and sheep prices - makes sense.
But to tie this in with declining sales figures over the past three years is misleading.
The past couple of years have been great for all commodities except wool. Farmers by their nature held their farms while income was good and typical of every cycle I have lived through they now en masse bring their farms to market - always a year too late.
They gain an extra hundred thousand income at the expense of losing a million or two in equity..
The falling farm sales have had two completely different causes, not one as inferred in this article.
Having spent his week travelling around quite a few rural areas, talking to farmers and real estate agents I havn't changed my view. (Sheep and Beef hill country)
1. Sales have slowed right up along with enquiries (forest buyers are virtually zero at the moment)
2. Good land still has some interest
3. Hard, remoter areas have zero interest from anyone.
4. Values are dropping fast - some places are well back to 4 - 5 years ago in reality - if you can find a buyer.
5. If you don't have associated dairy grazing options etc around its very tough - plenty of farmers being told to expect this year and 2 more years of low prices - nothing positive on that front it seems.
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