Agricultural sales decline and farmers may hold onto land to take advantage of high commodity prices.
Data released this week by the Real Estate Institute of New Zealand (REINZ) shows that there were 256 fewer farm sales for the three months ended December 2021 than for the three months ended December 2020.
Overall, there were 293 farm sales during the quarter ended December 2021, compared to 361 farm sales for the quarter ended November 2021 and 549 farm sales for the quarter ended December 2021.
“Sales figures for the three-month period ending December 2021 reflected lower volumes compared to similar periods over the past three years, with all categories impacted,” said Brian Peacocke, rural spokesperson at REINZ.
“Logic would suggest that due to very high dairy payment forecasts for the 2021-2022 season, and particularly high prices for beef, lamb and horticultural products, fewer rural properties have been available at the market. sale as landowners, predictably, have held on to properties in order to capitalize on the current high yields of commodities. »
However, despite this, the total agricultural sales volume for 2021 has increased significantly compared to 2020.
Peacocke says this reinforces strong demand for continued investment in rural land.
“On a balance note however, while the banking industry is currently more willing to support well-structured loan proposals, the inexorable grind of rising costs, shortages of quality labor and Supply chain difficulties are well-known constraints that continue to challenge rural industry,” he concludes.
1,831 farms were sold in the year to December 2021, 235 more than those sold in the year to December 2020, with 84% more dairy farms, 23.1% more less dairy support, 7% more grazing farms, 10% more finishing farms and 14.7% less arable farms sold over the same period.
The median price per hectare for all farms sold in the three months to December 2021 was $37,980, compared to $27,320 recorded for the three months ending December 2020.
The median price per hectare increased by 0.7% compared to November 2021.
The REINZ All Farm Price Index rose 2.8% in the three months ending December 2021 compared to the three months ending November 2021.
Compared to the three months ending December 2020, the REINZ All Farm Price Index increased by 21.8%.
Only the Otago region recorded an increase in the number of agricultural sales for the three months ended December 2021 compared to the three months ended December 2020.
Manawatu-Whanganui and Waikato saw the largest declines in sales, with 46 sales and 45 sales respectively.
Compared to the quarter ended November 2021, no region recorded an increase in sales.