Farms sales down in August – REINZ

But there are signs of activity picking up

By Mina Martin

30 Sep 2023

In the three months ended August, 175 farms were sold, down -21.2% compared to the same period in 2022 (222), and less -18.2% than the 214 farms sold for the three months ended July, fresh REINZ figures showed.

Farms sales in the year to August numbered 1,085, which was 494 fewer than were sold in the year to August 2022, with 34.4% fewer dairy farms, 7.9% fewer dairy support, 20.7% fewer grazing farms, 39.2% fewer finishing farms, and 16.3% fewer arable farms sold over the same period.

The median price per hectare for all farms sold in the August 2023 quarter was $24,920, lower by -8.3% than the $27,170 recorded for the three months ended August 2022 and down 14.8% compared to July 2023.

The REINZ All Farm Price Index, which unlike the median price per hectare, adjusts for differences in farm size, location, and farming type, dropped 8.1% in the three months to August compared to the three months to July.

Read more: REINZ rural report for August 2023

Three regions saw an increase in the number of farm sales for the three months ended August compared to the same period last year, with Otago being the most notable, with an additional four sales and Bay of Plenty and West Coast, with two more sales. In contrast, the biggest decreases in sales were recorded in Canterbury ( -14 sales) and Southland ( -13 sales). Compared to the three months ended July, four regions recorded an increase in sales, led by Northland, with four more sales and Auckland, with two more sales.

Shane O’Brien (pictured above), rural spokesman at REINZ, said the lower sales volume during the winter months was as expected, but that it was encouraging to note median sale prices holding across most sectors, despite a lower number of sales than previous years.

“Many of the rural sales teams are already noting an increase in activity as we hit,” O’Brien said. “Spring with listings being readied for market. The wetter than usual winter across many regions has seen a delay in releasing some properties to the market and some vendors are choosing to hold off awaiting the outcome of the general election in October to give more certainty around buying and selling decisions.”

He said prospective buyers for dairy farms and dairy support land have undoubtedly been impacted by the recent fall in the dairy payout, but this was expected to be short term, according to NZ’s largest dairy company, Fonterra.

In the carbon and forestry sector, there continued to be interest, but the recent decision by the Overseas Investment Office to not approve two applications for land and forestry conversion will undoubtedly be a factor for some buyers to consider.

In August, total farm sales comprised 31% of finishing farms, 24% grazing farms, 12% horticulture farms, and 10% forestry farms. These four property types accounted for 77% of all sales during the three months ended August, REINZ reported.

See table below for farm sales by type: