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Spring 2018 Property Pull-Out October 1, 2018
farmersweekly.co.nz
Agents believe a mix of factors is motivating some older farmers to sell once lambing and calving are finished.
Farm sales rebound picked Alan Williams
T
alan.williams@globalhq.co.nz
HE next few weeks should answer the question of how busy the rural real estate market will be going in to the spring and summer peak. “We’re assuming that a number of properties will come forward,” Real Estate Institute rural spokesman Brian Peacock said. “We’ll know that in October.” There were signals through the year that a mix of factors is motivating some older farmers to look at selling once lambing and calving are finished. The signals include frustrations over finding labour, greater compliance requirements, Mycoplasma bovis and the weather impacts over the last year or so. The timing coincides with favourable price factors such as a dairy farm milk payout forecast higher than last year and strong lamb and beef schedules. “We haven’t got a real feel on prices at this stage but I’d expect values to be close to where they finished last season.” Though there have been
localised impacts, weather and ground conditions this spring in most regions are better than last year and more encouraging for farm sale activity. Spring has certainly come earlier in Waikato where he is based. The institute’s latest data shows overall farm prices slipped marginally in the three months to the end of August but remain slightly better than a year ago. Turnover fell, with 1466 farms sold in the year, down 14.2% on the previous year. All sector activity was down. Arable farms tend to change hands at a slower rate than others and the number of transactions was 16.7% lower; finishing farm sales dropped 14%, grazing farms by 13% and dairy farm sales by 6.8%. According to institute figures, the All Farm Price Index fell 1.6% in the three months to August, compared with the July period. For the year though, the index rose by 4%. This index, regarded as the truest measure of value, adjusts for the difference in farm size, location, and farming type, whereas the median price measure doesn’t. The median price for all farms
sold during the three months to August 31 was $19,792/ha, down 29% on the $27,928 figure a year earlier, Peacocke said. From July to August, the median price was 7% lower. At odds with the overall figures, the institute’s Dairy Farm Price Index rose in the three months to August, by 3.6%, but fell by 13.2% in the year to August 31.
Beef and sheep farms are benefiting from strong schedule prices and horticulture returns are at record levels. Brian Peacocke Real Estate Institute The median price for the latest three months was $30,830/ha, down from $31,881 in July and from $37,842 in August last year. That is a median price fall of 18.5%. The fall was based on lower sales turnover and likely indicates most dairy farm activity was in second and third tier properties
where there was a lot of price sensitivity. He does expect top tier farms to come to market in the spring season and his own firm has farms coming in for listing. There are also indications of an industry focus on the volatility in Fonterra causing some producers to overlook the fact the milk price this year was better than last year. Beef and sheep farms are benefiting from strong schedule prices and horticulture returns are at record levels. The sector was helped by low interest and exchange rates though fuel price increases are having an impact. The Mycoplasma bovis risk remains a major focus and the industry view is stand-alone dairy support properties and dairy farms containing grazing areas will be well sought-after as farmers look to become selfcontained for off-season grazing. Six of the 14 regions recorded increases in sales over the threemonth period. Manawatu-Wanganui had 16 more sales, Southland 12 more and Otago an increase of nine. Canterbury had 14 fewer sales and Auckland was down by 11. The Otago and Southland
figures showed a strong, durable market for finishing and grazing farms and that also applied to Canterbury despite the lower three-month statistic there, Peacocke said. On a year-to-year basis 12 regions had a drop in sales, with the biggest fall being 21 in Waikato. He thinks 2018 activity is reasonably similar to last year though well down on 2016 levels. Most sectors have reduced activity at this time of year because farms are busy with lambing and calving. Finishing farms had a median sale price of $28,011/ha for August this year, higher than the July figure of $26,531 for July but down on the August 2017 figure of $30,566/ha. The year-to-year fall was 8.4%. For grazing properties, the latest median price was steady at $10,168/ha compared to July but was down on the $11,355/ha to August last year, a 10% fall. The very high product prices in horticulture have moved through to orchard prices though they are off an earlier peak. The latest median figure was $255,351/ha, down from $281,468/ha in July but well up on the $158,546/ha median in August last year.