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Farming, South Island - Source: ONE News
Farm prices have dropped sharply and number of farms sold has almost halved, data from Real Estate Institute of New Zealand (REINZ) shows.
The median farm in the three months to October was $875,000, a 42% drop on the $1.5 million median in the same period last year.
Most regions reported a drop in sales or flat sales, while the biggest price rises were seen in the Auckland, Taranaki and Manawatu/Wanganui regions.
Two hundred and five farms were sold in the October 2009 quarter, down 47% from the 390 properties sold last year, and 582 sold in the three months to October 2007.
Grazing accounted for the largest number of sales, with 111 sales. Also sold were 35 horticulture properties, 25 finishing farms and just nine dairy.
One reason for the drop in prices and farms sold may reflect that the three months to October last year followed Fonterra's record dairy payout.
However, REINZ president Peter McDonald says Fonterra's recent lift in this season's forecast is encouraging
"It will change a lot of people's budgets, encouraging greater confidence, but to date banks have been reluctant to show their hand and as a result, a lot fewer farms have been sold this year than you would usually expect at this time of the year," he says.
But he says market sources have suggested that there is strong interest in dairy farms.
While farm prices dropped, median prices for lifestyle blocks gained. In the three months to October, prices rose 4% to $445,000 compared with $428,000 during the same period last year.
Prices were also up on the $430,000 recorded for the three months to September 2009.
Median prices were highest in Auckland ($750,000) and Nelson ($507,000).
The turnover of lifestyle properties also rose, with 1,378 sold in the three months to October 2009 compared with 1,054 in the same period last year and 1,365 in the three months to September this year.
McDonald says the short-term outlook for the rural property market is uncertain and will depend on bank's lending policies over the coming months.
