Farm prices dropped at little in September, though on relatively light volumes, while lifestyle block sales annually hit a 20-year high - though this market is now starting to slow, new REINZ figures show.
The REINZ All Farm Price Index fell 2.4% in the three months to September 2016 compared with the three months to August, however it is 9.6% higher than it was a year ago. The index adjusts for differences in farm size, location and farming type, unlike the median price per hectare, which does not adjust for these factors.
A total of 9,122 sales of lifestyle properties were recorded in the year to September 2016, which was 20% more than were sold in the year to September 2015 and is now the largest number of lifestyle properties sold in a 12 month period in the past 20 years. The value of lifestyle properties sold was $6.86 billion for the year to September 2016.
The median price for all lifestyle properties sold in the three months to September 2016 was $5,000 lower at $530,000 compared with the three months ended September 2015 (-0.9%). The median price fell $15,000 (-2.8%) compared with August.
In terms of farm sales there were 51 more farm sales (+15.1%) for the three months ended September 2016 than for the three months ended September 2015. Overall, there were 388 farm sales in the three months ended September 2016, compared with 393 farm sales for the three months ended August 2016 (-1.3%), and 337 farm sales for the three months ended September 2015. A total of 1,790 farms were sold in the year to September 2016, 3.7% more than were sold in the year to September 2015, with some 25% fewer dairy farms and 5% fewer grazing farms sold over the same period.
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The median price per hectare for all farms sold in the three months to September 2016 was $26,825 compared with 26,020 recorded for three months ended September 2015 (+3.1%). The median price per hectare fell 2.5% compared with August.
In the volatile dairy sector, prices retreated again in the past month after rising in August. For the three months ended September 2016 the median sales price per hectare for dairy farms was $33,132 (12 properties), compared with $40,469 for the three months ended August 2016 (14 properties), and $25,108 (11 properties) for the three months ended September 2015. The median price per hectare for dairy farms has risen 32.0% over the past 12 months. The median dairy farm size for the three months ended September 2016 was 112 hectares.
On a price per kilo of milk solids basis the median sales price was $43.05 per kg of milk solids for the three months ended September 2016, compared to $45.51 per kg of milk solids for the three months ended August 2016 (-5.4%), and $33.09 per kg of milk solids for the three months ended September 2015 (+30.1%).
The REINZ Dairy Farm Price Index rose 2.4% in the three months to September 2016 compared with the three months to August. Compared with September 2015, the REINZ Dairy Farm Price Index rose 18.3%. REINZ cautions that care needs to be taken during the winter months as the low level of sales (12 for the three months to September) can distort the Index figures.
Speaking on the farm sales generally, REINZ rural spokesperson Brian Peacocke said sales volumes for the three months ending September 30 reflected "a status quo position or a slight easing compared to volumes for the previous three month period”.
"As farmers were concluding their annual peak workload activities over this period, many parts of the country were enduring a continuation of the wettest period for many years, to the extent that waterlogged pastures were desperate for relief and sunshine. By contrast, coastal regions in North Canterbury continue to suffer in silence, while Southland has experienced the most favourable winter / early spring period for many years.
"From a rural property perspective, September has been a month when appraisals have been carried out in anticipation of marketing programmes being launched for the spring sale period of October, November and December. Volatility of prices for rural produce has been a frustration for many but the counterbalancing factor for all, including the keenly focused banking sector, has been that in the main, signals from the marketplace have been positive as opposed to the more pessimistic outlook of 12 months ago."
Back on lifestyle blocks, there were 155 more lifestyle property sales (+7%) for the three months ended September 2016 than for the three months ended September 2015. Overall, there were 2,230 lifestyle property sales in the three months ended September 2016, compared with 2,354 lifestyle property sales for the three months ended August 2016 (-5%), and 2,075 lifestyle property sales for the three months ended September 2015.
"The very high volumes of lifestyle block sales for the three month period ending 30 September 2016 again confirms the strength and health of the market, to the extent that those high volumes appear now to be the norm,” Peacocke said.
In Auckland the median price eased slightly to $1.15 million in the three months to September compared with $1.21 million in the three months to August, but the median price in the latest period was still some 18.1% higher than a year ago.
Peacocke said listing supply had been tight in Auckland but was now easing; sales are strong and improving, reflecting the strong residential market; sellers of rezoned land are re-entering the market at a very strong level but for some participants, a lack of understanding of the Auckland Unitary Plan is causing roadblocks.
Farm sales
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