REINZ says dairy farms sales and prices are falling but lifestyle block sales surge, particularly in Auckland

There was a significant drop in the number and price of dairy farms sold in the three months to September but the lifestyle block market is booming, according to the Real Estate Institute of New Zealand.

There were just 11 dairy farm sales in the three months to September, compared to 21 in the three months to August, 20 in the three months to September last year and 28 in the three months to September 2013.

Prices were also down, with the average price per hectare falling to $25,108 in the three months to September, down from $26,906 in the three months to August and down a massive 38% compared to September last year when the average sale price was $40,462 per hectare.

Conversely, the median size of dairy farms sold in the three months to September increased to 163 hectares, from 130 hectares in the three months to August and 93 hectares in the three months to September last year.

The REINZ Dairy Farm Price Index, which adjusts for differences in farm size and location, was down 8.2% compared to August and down 17.6% compared to September last year.

However dairy farmers had received some relief with the recent lift in Fonterra’s Global Dairy Trade auction prices, REINZ rural spokesman Brian Peacocke said.

“While the problems are not yet solved, the signals indicate operational losses for the season may be less than anticipated,” he said.

“The current levels of interest rates and exchange rates are additional positive factors.”

Overall there were 337 farms of all types sold in the three months to September, compared to 387 in the three months to August and 347 in the three months to September last year.

The REINZ All Farm Price Index fell 7.6% compared to August and was down 6.5% compared to September last year.

“Spring sunshine, warmer temperatures, good prospects for beef and lamb, and the slow turnaround in the dairy industry are combining to lift morale in the rural sector,” Peacocke said.

The star performer in the rural property market over the last few months has been lifestyle properties, with 2075 lifestyle blocks selling in the three months to September, down slightly on the 2120 sold in the three months to August, but up 40% compared to the 1477 sold in the three months to September last year.

The median sales price for lifestyle blocks was $535,000 compared with $545,000 in August and $505,000 in September last year.

There was particularly strong activity in the lifestyle market around Auckland, where the median sales price was $973,500 in the three months to September, up 14% from $855,000 in the same period last year.

The REINZ said there had been a solid increase in values for lifestyle properties on Auckland’s northern fringe, where pockets of land were being rezoned residential and purchasers with long term perspectives were land banking.

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