Tuesday 21 February 2012

Rural property sales in Jan continue improving trend

Data released today by the Real Estate Institute of NZ ("REINZ") shows there were 135 more farm sales (+61.6%) for the three months ended January 2012 than for the three months ended January 2011. Overall, there were 354 farm sales in the three months to end of January 2012, compared with 219 farm sales in the three months to January 2011. The number of sales increased by 1 (+0.2%) in the three months to January 2012 compared to the three months ended December 2011. 1,231 farms were sold in the year to January 2012, the highest number of farm sales on an annual basis since June 2009.

The median price per hectare for all farms sold in the three months to January 2012 was $20,299; a slight fall from $20,445 for three months ended December 2011 and down $918 per hectare on the $21,217 recorded for the three months to January 2011.

Four regions recorded increases in sales volume for the three months ended January 2012, with Waikato recording the largest increase (+10 sales), followed by Manawatu/Wanganui (+7 sales) and Taranaki (+4 sales). Seven regions recorded lower sales with Nelson recording the largest fall (-9 sales) followed by Hawkes Bay and Bay of Plenty (-3 sales each), when compared to the three months ended December 2011. All bar one region recorded increases in sales volume compared to the three months ended January 2011.

"The number of sales for the three months ended January, while reflecting an underlying improving trend do show an easing in the number of sales," says REINZ Rural Market Spokesman Brian Peacocke. "We are seeing an increasing shortage of quality properties for sale as demand continues to rise on the back of very good farming conditions and improving farmer confidence. Even though demand is rising, buyers remain cautious and conservative in their price expectations and are unwilling to overpay."

"Because of the very good farming conditions, sellers of lesser quality properties are becoming unwilling to meet the market on price and are content to sit tight in the expectation that farm prices will eventually rise to meet their price point rather than the other way around. "

Included in sales for the month of January were 13 dairy farms at an average sale value of $25,342 per hectare. The average farm size was 140 hectares with a range of 45 hectares in Waikato to 291 hectares in Waikato. The average production per hectare across all dairy farms sold in January 2012 was 773 kgs of milk solids.

Grazing properties accounted for the largest number of sales with 51.4% share of all sales over the three months. Finishing properties accounted for 18.1%, Dairy properties 16.4%, and Horticulture and Arable properties 4.8% each. These five property types accounted for 95.5% of all sales during the three months ended January 2012.

For the three months ended January the median sales price per hectare for dairy farms was $34,298 (58 properties), compared to $37,045 for the three months ended December 2011 (50 properties), and $35,0090 (46 properties) for the three months ended January 2012. The median dairy farm size for the three months ended January 2012 was steady at 141 hectares.

For the three months ended January 2012 the median sales price per hectare for finishing farms was $21,080 (64 properties), compared to $20,445 for the three months ended December 2011 (57 properties), and $10,593 (21 properties) for the three months ended January 2011. The median finishing farm size for the three months ended January 2012 was steady at 80 hectares.

For the three months ended January 2012 the median sales price per hectare for grazing farms was $13,601 (182 properties) compared to $13,854 for the three months ended December 2011 (194 properties), and $13,741 (92 properties) for the three months ended January 2011. The median grazing farm size for the three months ended January 2012 was 84 hectares.

For the three months ended January 2012 the median sales price per hectare for horticulture farms was $140,000 (17 properties) compared to $137,055 (23 properties) for the three months ended December 2011 , and $137,434 (28 properties) for the three months ended January 2011. The median horticulture farm size for the three months ended January 2011 was five hectares.

The lifestyle property market also saw a 25.0% increase in sales in the three months to January 2012 compared to January 2011. 1,231 sales were recorded in the three months to January 2012 compared to 985 sales in the three months to January 2011. 29 fewer sales were recorded compared to the three months to December 2011 (-2.3%), largely attributable to seasonal factors.

Five regions recorded increases in sales compared to December while seven recorded falls. Manawatu/Wanganui recorded the largest increase (+11 sales), followed by Nelson (+6 sales) and Auckland (+5 sales). Southland and Canterbury both recorded the largest drop in sales (-14 sales), followed by Waikato (-9 sales) and Otago (-7 sales).

The national median price for lifestyle blocks eased by $6,250 (-1.3%) from $476,250 for the three months to December to $470,000 for the three months to January. Compared to three months to January 2011 the median price increased by $30,000 (+9.3%).

Commenting on the lifestyle property market statistics Brian Peacocke said, "We are seeing a solid increase in the number of sales, particularly compared to this time last year, however, rising seller expectations on price and an emerging shortage in good quality properties are likely to constrain the market in the near term."

Source: http://www.voxy.co.nz/business/rural-property-sales-jan-continue-improving-trend/5/115541

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