THE LATEST DATA ON FARM SALES HAS SHOWN A FURTHER SLUMP IN VOLUMES AND A DROP IN PRICES, ACCORDING TO THE REAL ESTATE INSTITUTE OF NEW ZEALAND’S RURAL MARKET STATISTICS.
There were only 171 farm sales in the three months ended September 2022, down 17.8 per cent on the three months ended August 2022 and down 38.9 per cent on the three months ended September 2021.
Overall, 1,525 farms were sold in the year to September 2022, down 15.3 per cent compared to the year to September 2021. Dairy farms were down 3.2 per cent, dairy support down 19.3 per cent, grazing farms down 19.4 per cent, finishing farms down 13.7 per cent and arable farms down 7.8 per cent.
The median price per hectare for all farms sold in the three months to September 2022 was $23,080, down 10.2 per cent on the three months ended August 2022 and down 25.3 per cent on the three months ended September 2021.
The REINZ All Farm Price Index, which adjusts for differences in farm size, location and type, decreased by 3.2 per cent in the three months to September 2022 compared to the three months to August 2022 but was up 0.2 per cent compared to the three months to September 2021.
Increasing inflation and increasing interest rates are causing concern but REINZ also pointed to ‘simmering resentment’ in rural New Zealand about environmental policies and rules, especially around climate change and water, impacting on investment decision-making. Meanwhile, although current returns for farm production have been good, they have been increasingly volatile with increasing farm input costs eroding profitability. This is adding to a sense of caution.