Fewer farms were sold in the May quarter than the same period last year
Fewer farms were sold in the three months ended May than the same period in 2022, according to data released by the Real Estate Institute of New Zealand.
In the May quarter, 258 farm sales were recorded, down 39.2% from the 424 sales in the three months to May last year, and up +3.6% to the 249 sales in three months to April.
Shane O’Brien (pictured above), rural spokesman at REINZ, said sales continued to ease in May compared to previous months, an expected trend that has been evident this year to date.
“Several factors continue to impact on this trend, most notably being the reduced number of listings across most sectors except for a larger than usual number of horticultural listings in the Bay of Plenty area,” O’Brien said.
“The reduced number of sales is also impacted by buyers continuing to take a wait and see approach to buying amidst the backdrop of higher interest rates, farm expenses increasing (reported at circa 16%) and lower farm incomes off the back of adverse weather and challenging economic conditions.”
In the year to May, 1,163 farms were sold. That’s less 570 fewer than those sold in the year to May 2022, with 36.1% fewer dairy farms, 6.7% fewer dairy support farms, 22.7% fewer grazing farms, 35.1% fewer finishing farms, and 32.2% fewer arable farms sold over the same period, REINZ data showed.
“Many agents are reporting continued enquiry from buyers, but many are not committing to land purchases yet,” O’Brien said. “While no one factor is causing the reduction in sales, the culmination of these along with an uncertain outcome in this year’s general election is creating caution in many areas.”
“The unfavourable weather in the North Island has impacted on potential buyers focusing on matters inside the farm gate while in the South Island many farmers remain concerned about future government regulation of the farming environment.”
The median price per hectare for all farms sold in the May quarter was $28,105, which was -5.8% lower than the $29,845 sales recorded for the three months ended May 2022. The median price per hectare was very similar to April 2023.
All regions recorded a decline in farm sales numbers for the three months ended May 2023, with Waikato and Northland recording the biggest decreases in sales, at -25% and -24, respectively. Compared to the three months ended April 2023, five regions posted an increase in sales.
In May, 31% share of all sales comprised grazing farms. Finishing farms accounted for 26% of all sales, dairy farms, 16%, and dairy support farms, 9%. These four property types accounted for 82% of all sales during the three months ended May.
One bright spot, O’Brien said, was the viticultural market.
“In Marlborough, sales are now being reported at record levels for good quality Sauvignon Blanc land and more land is being acquired for further development in grapes,” he said. “Wine exports are reportedly up 24% and along with the recent FTA with UK giving this industry some renewed confidence.”
“The much-reported acquisition of land for forestry has also slowed off the back of reduced export log and carbon pricing and some amendments in late 2022 to the OIO regulations on greenfield forestry development.”
O’Brien noted, however, that although sales volumes bounced back from last year, the sale values in many areas remained at strong levels mostly in line to 2022.
“This may not be the case in the previous hot spots such as Bay of Plenty horticultural market where a dearth of sales data is making it difficult to see where the current market is sitting,” he said.
The REINZ All Farm Price Index rose 3.8% in the three months to May compared to the three months to April and was down 5.5% in the three months to May 2022.
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