Wairarapa hasn’t recorded a single farm sale since March, according to the Real Estate Institute of New Zealand [REINZ].
REINZ said the farm real estate situation in Wairarapa was “anaesthesia-like”.
However, Wairarapa NZR Real Estate director Blair Stevens said there had definitely been farm sales in the last six months.
“Some may have sold but are subject to due diligence, but we’ve had quite a few [sales].”
He said due diligence, especially if involving overseas investment, could take between six and nine months.
Stevens said it was always a quiet period over the winter, but he’d never expect not to see any sales at all. He said most farms were marketed in the spring or autumn.
Stevens asked what the threshold land size was for REINZ’s “farm” classification was. According to a search on realestate.co.nz, there were eight Wairarapa farms for sale, one of which had been listed for two years.
When lifestyle properties and forestry blocks were included in the search, there were 67 properties for sale.
REINZ said there were 126 fewer farm sales across the nation in the three months ended August, 2022 than for the three months ended August, 2021.
“Overall, there were 204 farm sales in the three months ended August, 2022, compared to 255 farm sales for the three months ended July, 2022, a 20 per cent reduction, and 330 farm sales for the three months ended August, 2021.”
It said 1,545 farms were sold in the year to August, 2022 – 278 less than were sold in the year to August, 2021, with 2.6 per cent more dairy farms, 25.2 per cent fewer dairy support, 21.5 per cent fewer grazing farms, 13.9 per cent fewer finishing farms, and 17.5 per cent fewer arable farms sold over the same period.
The median price per hectare was also reduced by 5.4 per cent when comparing the three months to August, 2022 with the three months to August, 2021.
Additionally, the median price per hectare decreased by 6.5 per cent compared to July this year.
REINZ rural spokesman Brian Peacocke said sales data for the three-month period ending August, 2022 reflected a significant reduction in total farm sales, compared to the corresponding periods in the previous two years.
Between June and August, 2020, there were 358 sales, 330 in the same period in 2021, and only 204 this year.
“Reasons for such reductions will likely include an increasing degree of caution mingled with emerging resentment towards central Government, inexorable increases in costs across the board, and widespread volatility in climatic conditions.”
Peacocke said Tasman, Nelson, Marlborough, Taranaki and the Far North were at the forefront of those regions most impacted by the turbulent extremes in weather being experienced more frequently across New Zealand.
“From a financial perspective, strong levels of income in recent seasons have allowed significant debt reduction across much of the rural sector, albeit erosion of the increased equity due to increases in costs is having a sobering effect across the sector.”
He said while it seemed that decent levels of income were likely to continue, reports of decreasing levels of production from a national perspective combined with the aggressive increases in costs would have a balancing effect.
Peacocke said inflation had hit 7.3 per cent, while fertiliser costs were up 30 per cent, fuel was up 19 per cent, and general expenses had also ballooned.
