September farm sales weak with just one dairy farm changing hands

Just 53 farms were sold during September, down from 75 last September and 130 in September 2008, the Real Estate Institute of New Zealand’s September Rural Market Report shows, although the median sales price rose.

Of the 53 sales during September just one was a dairy farm. In the three months to September just 12 dairy farms were sold, compared to 10 in the same period last year and 55 in the same period of 2008. Over the previous four years the total number of farms sold during September has averaged 127, more than double the number sold last month.

Real Estate Institute of New Zealand spokesperson Bryan Thomson said the median farm price for the three months to September was NZ$1,012,500, which is 15% up on NZ$877,500 in the same period last year. However, it remains 39% down on the median price of NZ$1,672,500 in the same period of 2008.

Of the 53 farms sold during September, the biggest contributor was grazing farms at 37 with horticulture next with eight farms changed hands. In the regions just eight farm sales were recorded in the Waikato during September, just one in Taranaki and four in Southland.

Thomson said for dairy farmers the average price per kilogram of milk solids fell to NZ$30 from NZ$33 in August and NZ$37 in July.

“Late last month, Fonterra announced its second-highest payout of NZ$6.70 (before retentions) for 2009/10, up from NZ$5.21 last year so we would expect to see impact from this positive news over coming months,” says Thomson.

The number of sales of lifestyle properties in the three months to September fell to 1039 from 1066 in the three months to August. The median selling prices was NZ$427,500 versus NZ$436,750 in the three months to August and NZ$430,000 in the three months to September last year.

See REINZ's September statistics here.