David Unwin / Tips
REINZ has only recorded 16 agricultural sales in all of Manawatū in the past three months.
Manawatū’s larger rural real estate market ended the winter with a whimper, as the region saw a surprisingly large drop in agricultural sales.
The latest report from the Real Estate Institute of New Zealand on rural real estate showed that there were 51 fewer farms sold in the past three months, compared to 357 sold at the same time last year.
Manawatū-Whanganui recorded only 16 agricultural sales at this time, 22 fewer than at the end of last winter. Only Wellington came close to this drop, with 15 fewer farms sold.
“[The overall] the figures reflect both the time of year, when the rural sector is occupied with calving and lambing, and the impact of the lockdown influenced by Covid-19, both factors impacting sales results sluggish, ”said institute rural spokesperson Brian Peacocke.
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Despite calls from the New Zealand government to diversify, exporters send a big slice of the pie to China every year.
However, even taking this into account, agricultural sales in the Manawatū, Whanganui and Tararua regions were unusually low, he said.
Manawatū’s larger market tended to be quite flat and stable this time of year, with many farmers preferring to sell in mid-October.
It was a puzzling anomaly, with no clear cause other than a random variation in the market, Peacocke said.
Rural and Lifestyle Sales Manager Richard Anderson said there was no easy answer other than the obvious case of fewer properties on the market, which means fewer sales.
Since farm-gate sales were less common than residential sales, it didn’t take a lot of people to delay a sale to make a big change. But, those fluctuations tended to ease over the long term, he said.
Another potential factor could be a little more farm sales slipping under the radar than usual.
“There are some ongoing out-of-home sales, from neighbor to neighbor, which do not appear in the statistics. “
Whatever the reason for the overall drop, Anderson said his company was still ahead of sales compared to the same time last year. He expected more farms to start entering the market soon.
The outlook for the rural real estate market and agriculture in general was sunny from spring to summer, he said.
“Interest rates still look good, lamb, beef and milk yields are high and everything is very buoyant.
Fonterra forecast a record opening milk price for the 2021/22 season, ranging from $ 7.25 per kilogram of milk solids, to $ 8.75 per kgMS, with a midpoint of $ 8 per kgMS.
The highest opening price ever for the dairy cooperative was $ 7 per kgMS.
A recent Rabobank report said New Zealand beef export prices remained high and above the five-year average, despite disruption from the pandemic thanks to strong demand from China.
Federated Farmers Manawatū chairman Murray Holdaway said the drop in sales was likely due to chance.
There had been a big push in the agricultural sector over the past few years to support and encourage farmers with succession planning.
If a few more farmers reach retirement age with the intention of passing the farm on instead of selling it, that could explain part of the change.
“I know of a few farms, including a large dairy farm, that were recently sold within the family, so this is definitely a possibility. “