The rural property slump continued in June with farm sales continuing to decline and lifestyle block sales bouncing along the bottom.
The Real Estate Institute of NZ recorded 215 farm sales nationally over the three months to the end of June. That's down 13% compared to the three months ended May, and down 6% compared to the three months ended June last year.
The latest figures show the continuation of an ongoing slump in farm sales which have almost halved over the last four years. (See the first graph below for the trend).
Prices are also significantly weaker, with the REINZ All Farm Price Index, which adjusts for differences in farm sales by farm size, type and location, declining by 12% in the three months to June this year compared to the same period of last year.
Dairy farm sales held their own over the three months to June, rising by 3% compared to a year earlier but prices were weaker, with the REINZ Dairy Farm Price Index, which adjusts for differences in the mix of sales by farm size and location, dropping 12% on an annual basis.
REINZ rural spokesperson Shane O'Brien said interest from potential buyers was lower than expected.
"Buyer enquiry on most farm listings is lower than desired as farmers across all sectors grapple with the change in weather, lower than needed farm product prices and higher farm working expenses," he said.
While farm sales remain on the slide, lifestyle block sales appear to have stabilised after falling steadily from late 2020 to early 2023.
Altogether 1296 lifestyle blocks were sold in the three months to June, down just 1.6% compared to the same period of last year.
On an annual basis 5512 lifestyle blocks were sold in the June year, down 4% compared to the previous 12 months.
The median price of all lifestyle blocks sold in the 12 months to June this year was $975,000, down 2.1% compared to a year ago.
"The slight decrease in [lifestyle] sales activity compared to 2023 wasn't unexpected as many buyers continue to balance higher interest rates and challenging economic conditions when making buying decisions," O'Brien said.
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15 Comments
Dairy farm sales held their own over the three months to June, rising by 3% compared to a year earlier but prices were weaker
Good sign
The Dead, Lifeless cat, is indeed at "Peak, body twisting altitude"
Watch out below!
The next 5 to 10 years will be an interesting case study in how to revalue hugely over valued assets.
The dairy boom is over due to the consents process (its still the most profitable production system ).
There are a large number of sheep farmers either in their seventies or fast approaching who believe the farm they paid hundreds of dollars an acre for is now worth $15000 an acre .
There is no land use change on the horizon that will save these farmers , eventually they will run out of options.
Arent sheep and beef 5 to 10 k per hectare
and still dosnt work at that price. Needs to be $1,000 to $2,000 per ha to have a chance of economically work.
And none of the kids wants to pay Dad out at current prices …. Stock auction yards look like a Ryman ad’s these days.
Before the elections there was a meet the candidate in Waipukurau… it was 100% gray hair and blue rinse
With dairy there is enough cashflow to pay a mgr, the smart sold out to forestry
Yes but how much annual income does a manager earn ... not enough for the hours involved
Think you’ll find Stats NZ has good info on that, past few years has lifted wages considerably and caught up to the median. Housing for farm workers is still relatively inexpensive, no traveling to work costs, meat, milk, vege gardens. They, for the most part, do pretty good.
"the smart sold out to forestry"- the smart sold out to the carbon scam - impoverishing the rest of the nation. The price of luxury beliefs paid by people living in cars and workers just trying to fill the car to get to work.
Bullocks, people aren't living in cars because of carbon credits paid to farmers. You can't be selective, it might have something to do with not building social housing for 9 years.
Always fascinating to hear from those with no or minimal skin in the game.
"Farmers paid too much, farmers owe too much ....blah blah blah..."
What a load of bollocks.
Like any business group, retailer, wholesaler,, construction etc, I am sure there are some who overpaid or are under funded..
But there are a lot of successful farming families and companies out there too, quietly getting on with business.
Dairy farming has provided a pretty good return for our family, allowed us to grow and provides both security and cashflow to accommodate the next generations - if they choose.
Exactly. There's dual asset bubbles and commodities bubbles to contend with in farming, but if you deploy both smart financing and smart farming you can ride it out and safely ignore the complainers.
Exactly? With the caveat you inherited the family farm via family friendly finance arrangements.
Damn right Rastus. I’ve worked in the agriculture industry for a long time, so many of these farmers have forgotten how they got the farm handed down to them and have convinced themselves how they worked really hard for what they have. Silver spooners.
Agree Wilco, Dairy if well run does well. Even some good hill country ones but more of those under stress and no easy fix for many. Time will sort it out and values adjust along with changes we havnt even thought about yet.
Nothing stays the same but good business management and changing as required sorts out the winners.
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