Pressure is being exacerbated by two factors
The Real Estate Institute of New Zealand (REINZ)’s latest report has revealed less rural and lifestyle property sales for the three months ending February 2020.
The report found that farm sales dropped by 11.1% for the three months ending February 2020 compared to the three months ending February 2019 – with only 329 sales compared to 363 for the three months ending January 2019.
“Sales data for [the three months] ending February 2020 reflect a rural industry under pressure in terms of volumes and values, particularly as that relates to the dairy sector,” Brian Peacocke, rural spokesman at REINZ, said.
He explained that the pressure got worse due to an extreme weather event caused by severe drought conditions in North Island and South Island, as well as an extreme financial event caused by a sharp tightening of financial criteria applied by the trading banks.
“The combination of those two events, quite apart from the threat of COVID-19, is creating downward pressure on the ability of many soundly structured rural operations to grow their business as they would like [despite] the availability of some great opportunities and extremely low interest rates,” he said.
Read more: REINZ identifies firm housing regulations as factor in low house sales
The report also showed a 1.7% drop in lifestyle property sales for the three months ending February 2020 compared to the three months ending January 2020.
“Sales data for [the three months] ending February 2020 shows a recovery in volumes from the drop experienced in the previous month of January, with the bottom line holding steadily to volumes recorded in the spring of 2019,” Peacocke explained.
“All regions apart from Taranaki and the West Coast recorded an improvement in sales numbers. Prices in the main also held well, albeit a slight easing in the median price from a record $755,000 to the current level of $710,000 for the three-month period.”
