Data released by the Real Estate Institute of New Zealand (REINZ) shows there were 131 more farm sales (+48.5%) for the three months ended September 2020 than for the three months ended September 2019.
Overall, there were 401 farm sales in the three months ended September 2020, compared to 386 farm sales for the three months ended August 2020 (+3.9%), and 270 farm sales for the three months ended September 2019. 1,285 farms were sold in the year to September 2020, 5.6% fewer than were sold in the year to September 2019, with 24.1% less Dairy farms, 14.9% less Grazing farms, 9.3% less Finishing farms and 4.6% less Arable farms sold over the same period.
The median price per hectare for all farms sold in the three months to September 2020 was $26,917 compared to $25,754 recorded for three months ended September 2019 (+4.5%). The median price per hectare increased 4.9% compared to August 2020. The REINZ All Farm Price Index increased 0.7% in the three months to September 2020 compared to the three months to August 2020. Compared to the three months ending September 2019 the REINZ All Farm Price Index rose 0.7%. The REINZ All Farm Price Index adjusts for differences in farm size, location, and farming type, unlike the median price per hectare, which does not adjust for these factors.
Eleven of the 14 regions recorded an increase in the number of farm sales for the three months ended September 2020 compared to the three months ended September 2019, with the most notable being Canterbury (+27) and Manawatu/Wanganui (+24). Otago recorded the most substantial decline in sales (-6) followed by Bay of Plenty (-2). Compared to the three months ended August 2020; eight regions recorded an increase in sales with the biggest increases being in Bay of Plenty (+6), and Taranaki and Canterbury (+5).
REINZ's rural spokesperson says: "As evidenced by the increase in farm sales for the 3-month period ending 30 September, the rural sector continues to reinforce its primary position as being the backbone of the NZ economy. "The increase in total sales volumes suggests farmers and investors alike are opting for the security of land ownership as opposed to investing in other sectors which have been and are continuing to be impacted by the constraints imposed by the COVID-19 pandemic.
"The median price reinforces the above viewpoint with most categories holding par or increasing slightly, apart from the horticulture sector which continues to grow in value and go from strength to strength."
"Whilst the volatility of early spring conditions with plunging temperatures and late falls of snow have caused losses within late lambing ewes, the accompanying sweep of rain across the country has brought a gasp of relief from farmers in many regions who were "staring down the barrel" of another prolonged dry spell, but have now been given a period of respite, brief or otherwise, only time will tell."
"Product prices, like the weather, also reflect volatility with beef and sheep prices under temporary pressure, but the dairy industry is smiling with news of an increase in the current payout from Fonterra, the major dairy processor in the country, this in spite of some much required restructuring and restoration of its balance sheet."
"Tatua in central Waikato has posted another record payout, and labour issues aside, the horticulture sector continues to exude good health," he concludes.
Source: REINZ Rural Property Report, 20 October 2020
This article is featured in Harcourts' Lifestyle & Rural Property Focus, Issue 4 2020.