Other farm sectors experience mixed results
New Zealand’s rural property market is seeing renewed momentum as farm sales surged 26.5% for the three months ending September 2024, according to recent data from the Real Estate Institute of New Zealand (REINZ).
In the 12 months leading up to September, a total of 928 farms were sold, marking a drop of 150 from the previous year. Different types of farms showed varying sales trends over this period, with Dairy, Dairy Support, Grazing, and Finishing farms all declining in sales volume, while Arable farms saw a 25.6% increase. The median price per hectare for all farms rose to $27,900.
“It is very pleasing to report on the recent lift in sales volume over the past three months. So far, this year has been a cliched year of two halves, with limited sales activity throughout the first half of the year. Still, the recent lift in the dairy payout and a slight reduction in interest rates, with further cuts being signalled, has given the market some much-needed impetus,” REINZ’s rural spokesperson Shane O’Brien (pictured) said.
Regionally, Manawatu-Wanganui and Canterbury led in sales growth, with each posting double-digit gains. Despite the overall increase in activity, the REINZ All Farm Price Index showed a 2.9% decrease for the three-month period ending September 2024, down 14% from the same period in 2023. This index takes farm size, location, and type into account, providing a nuanced view beyond median prices.
Dairy farms experienced notable growth in sales price, with the median price per hectare reaching $39,260, a 20.1% increase from the previous year. The price per kilogram of milk solids also climbed, reaching $45.97 in September. Though the REINZ Dairy Farm Price Index dropped by 3.5% from August to September, it still showed a 28.5% annual increase, indicating strong sector resilience.
Sales trends varied across farm types: Finishing farms saw a 6% drop in median price over the past year, while Grazing farms recorded an 8.1% increase. In contrast, horticulture farms faced a 41% decline in median sales price, down to $191,200 per hectare in September.
O’Brien observed renewed interest in the dairy market, with “considerable demand in the dairy sector, with several recent offerings of tier-one dairy farms reporting strong enquiries, which we haven’t seen for 24 months or more.” Dairy Support sales also saw movement, making up 11% of total sales volume.
However, some sectors like sheep farming continue to face challenges from low prices and dry conditions, the horticulture market is seeing some renewed activity following a prolonged lull.
