Farm sales in three months to January down 38% on a year earlier, lifestyle block sales also languishing

The rural property market continued to slump in January, with sales of both farms and lifestyle blocks in decline.

According to the Real Estate Institute of NZ, 228 farms were sold over the three months ending January 2024, down 38% compared to the three months ending January 2023, and down 56% compared to the three months ending January 2022.

The ongoing slide in sales has affected all farm types, with dairy farm sales halving in the last year, dropping from 86 over the three months to January 2023 to 43 in the three months to January this year. Finishing farm sales dropped from 100 to 69 over the same period, grazing farm sales declined from 102 to 55 and horticulture properties dropped from 21 to 9.

Prices were also weaker, with the REINZ All Farm Price Index, which adjusts for differences in the mix of farms sold by type, price and location, declining by 10.1% from January 2023 to January 2024.

The REINZ Dairy Farm price index was down 2.7% at the end of January 2024 compared to a year earlier.

"The market has continued its downward trend as volumes of sales recorded dips again during the first month of 2024. It is particularly noticeable in the dairy sector," the REINZ's rural spokesman Shane O'Brien said.

"The reduced dairy payout plus rising farm costs and higher interest rates are causing dairy farm buyers to take a cautious approach, with many farmers focused on farm operating costs at this time."

"Although many farmers are buoyed by the recently announced lift in dairy payout for this season by Fonterra, and encouraging results in the recent Global Dairy Trade auctions, this is yet to transpire in an increase in sales activity so far this year," O'Brien said.

The lifestyle block market also remains weak, with just 1166 lifestyle sales recorded by the REINZ over the three months to the end of January this year. That's up from 1127 (+3.5%) compared to a year earlier.

But sales over the three months to January this year were down by 41% compared to the three months ending January 2022, and down by 57% compared to the thee months ended January 2022.

The average price of lifestyle blocks sold in the three months to January this year was $950,000, down by $80,000 compared to 12 months earlier.

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