137 farms sold in June, the most for a June since 2008 as early winter activity reflects growing confidence; prices per hectare slip

Data released today by REINZ shows that there were only 11 more farm sales in June 2013 than there were in the same month a year earlier, but early winter sales enquiry has the market feeling more buoyant.

“Enquiry in all farm categories is consistently strong in all regions, in contrast to the normal seasonal pattern in winter,” says REINZ Rural Market Spokesman Brian Peacocke, “the limiting factor on farm sales is the availability of properties to meet demand, impacting on sales volumes in the latter part of the June quarter. In most regions farms that have been on the market for two to three years have now been sold”.

“In South Waikato dairy farms have been under strong competition."

"The final five Carter Holt dairy farms have been sold by tender with sharemilkers in place, with possession in mid-July. Notably these sales have occurred without Fonterra shareholdings. Strong regional demand has seen an increase in dairy farm values in Southland.”

“The increased dairy payout, lower New Zealand dollar and continuing low interest rates are the key drivers of increasing farm confidence across the country.  As a result, all regions are reporting a shortage of listings, with those farms available for sale are attracting very strong attendance at open days, and multiple offers.”

Grazing properties accounted for the largest number of sales with 48.1% share of all sales over the three months to June, Dairy properties accounted for 13.9%, Finishing properties accounted for 19.4% and Horticulture properties accounted for 8.9% of all sales.  These four property types accounted for 90.3% of all sales during the three months ended June 2013. 

The median price per hectare slipped to $19,716 in the three months to June 2013, 4% lower than a month ago, but 12% higher than June 2012. 

Nationally, lower average prices were seen for dairy units, while higher average prices were seen for finishing and grazing properties compared with those same categories in May; all others were stable.

June sales included: 
    8 arable farms,
  17 dairy farms,
  26 finishing units,
  61 grazing properties,
  17 horticultural,
    8 farms of other types

The number of sales is presented here, without the average price, because average prices bounce around dramatically depending on the size and type of business unit being sold. However, the following table sets out the median prices per hectare over the past three months, as reported by REINZ.

Lifestyle blocks

The lifestyle property market saw an 18.2% (+271 sales) increase in sales volume in the three months to June 2013 compared to June 2012.

1,763 sales were recorded in the three months to June 2013 compared to 1,492 sales in the three months to June 2012.  81 fewer sales were recorded compared to the three months to May 2013 (-4.4%).

For the 12 months to June 2013 there were 6,124 unconditional sales of lifestyle properties, an increase of 16.1% over the 12 months to June 2012.10 regions recorded increases in sales compared to June 2012 while three recorded decreases in sales.

Auckland recorded the largest increase (+135 sales), followed by Waikato (+35 sales) and Canterbury (+26 sales).

Compared to May 2013, four regions recorded increases in sales with nine regions recording a decrease.

Taranaki recorded the largest increase in sales (+18 sales), followed by Otago (+12 sales) and Southland Bay (+5 sales).

The national median price for lifestyle blocks rose by $27,500 (+5.8%) from $477,500 for the three months to June 2012 to $505,000 for the three months to June 2013.

The median price for lifestyle blocks in Auckland rose by 10.2% in the year to June 2013, and rose by 10.8% in Waikato, however, the median price fell by 1.8% in Canterbury.

Compared to May 2013 the median price eased by $4,500 (-0.9%) from $509,500 in May to $505,000 in June.

The number of days to sell for lifestyle properties eased by two days, from 67 days for the three months to the end of May to 69 days for the three months to the end of June.  Compared to the three months ended June 2012 the number of days to sell improved by 15 days from 84 days to 69 days.

Canterbury recorded the shortest number of days to sell in June at 47 days, followed by Taranaki at 52 days and Southland at 53 days.

Gisborne recorded the longest number of days to sell at 105 days, followed by Manawatu/Wanganui at 94 days and Bay of Plenty at 92 days.

Commenting on the lifestyle property market Peacocke said, “Increasing confidence and rising demand for properties is emerging in the lifestyle market with some regions reporting strong interest from buyers while at worst some are reporting a steady market.”

“The lifestyle market on the southern edge of the Auckland urban area is strong with interest in properties large enough for future sub-division and healthy activity in the $1 million range."

"Activity is also strong in central Waikato and around Hamilton with Auckland and ex-pat purchasers active. There have been a considerable number of appraisals carried out in the Waikato as vendors prepare for the spring market. Auckland buyers are also increasingly active in the Bay of Plenty.”

“The Canterbury market remains active in the $600,000 - $700,000 range, although quieter above $800,000 with buyers predominately coming from Christchurch City.”