Dairy farms and lifestyle blocks are the main weak spots in the rural property market, according to the latest figures from the Real Estate Institute of New Zealand.
The REINZ recorded 362 farm sales in the three months ended April, down 13.4% compared to the same period of last year.
For the 12 months to April, farm sales were down 1.7% compared to the previous 12 months, with the decline mainly caused by 31.3% fall in the number of dairy farms sold and a 9.3% decline in finishing farm sales, while grazing property sales were up 22% and and arable farms sales were up 5.7%.
Lifestyle block sales in the three months ended April were down 8.7% compared to the same period of last year and in the 12 months to April were down 6.4% compared to the previous 12 months.
Prices were also mixed, with the REINZ All Farm Price Index, which adjusts for differences in the sales mix of farm type, size and location, up 5.7% in the three months ended April compared to the same period of last year.
However the REINZ Dairy Farm Price Index was down 23.7% in the three months ended April compared to the same period of last year.
The median price of lifestyle properties sold in the three months ended April was $680,000, up 4.6% compared to a year earlier.
"Data for the three month period ending April reflects a continuation of the trend in sales volumes evident over recent months," REINZ rural spokesman Brian Peacocke said.
"Compared to the equivalent period in 2018, sales volumes for dairy and finishing farms are well down, grazing units have increased, arable and horticultural properties are holding par," he said.
Peacocke also raised concerns about the conversion of farmland to forestry and the adverse effect that could have on rural communities.
"Major concern is erupting in eastern regions of Wairarapa and Wairoa as forestry interests purchase increasing areas of pastoral land for conversion to trees, triggering the potential for rural depopulation with the attendant impact of social and economic consequences for the smaller rural communities," Peacocke said.
"Serious questions are being asked regarding the Overseas Investment Office criteria for offshore interests to invest in forestry as opposed to pastoral farming, with strong suggestions of political bias," he said.
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Our local real estate market seems to be splitting in two. I am aware of 2 dairy farms where the vendors have dropped their prices by 20-25% and buyers are saying they are still too dear. However in the meantime forestry interests have set a base line for breeding country values. And despite the headlines the Aucklanders have stopped coming north and our larger lifestyle market has gone to sleep.
A question that may relate to the above? When was the last time in a social gathering when meeting a stranger did you admit your occupation is dairy farmer?
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