NZ ECONOMY FAILING: Farm sales drop by almost 40%

PHOTO: Dairy support blocks and grazing farms were the slowest for sales. Photo: RNZ / Cosmo Kentish-Barnes

Just released real estate data shows a massive slump in farm sales in the three months to September compared with the same period last year.

There were nearly 109 fewer sales – that is a 39 percent drop compared with 2021, and a 53 percent drop when compared with 2020.

Real Estate Institute rural spokesperson Brian Peacocke said the median price also fell nearly 4 percent, down to $23,080 a hectare, compared with $30,890 recorded for the three months ended September 2021.

He said the sales drop was worse than usual for this time of year – which was a generally slower time – and a few factors were at play including inflation and emissions tax.

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“The headwinds include increasing interest rates, supply chain issues are still a factor, inflation is particularly strong in the rural economy. So whilst it’s 7.3 percent or 7.2 percent in the national perspective, it’s about 19 percent for dairy and about 10 -11 percent for sheep and beef in terms of inflation.

“Income levels have been really strong, it’s just confidence is being eroded in the overwhelming increase in costs across the board and hence this extra emissions tax is really striking at the nerve of the industry really severely. I think people are sitting back and taking stock at moment,” he said.

Peacocke said dairy support blocks and grazing farms were the slowest for sales, down about 19 percent, but even arable properties which are normally strong, took a hit – down 8 percent.

He said several districts stood out in the statistics for having no farm sales.

“For instance even this month there were no farm sales in the Auckland region, virtually none in the East Coast and that’s Gisborne/Hawke’s Bay.

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“They were quite reduced in Taranaki, particularly lower in the Otago/Southland regions, and those regions have been quite strong in recent months. The contrast to that is Manawatū Tarawera, they’re having quite a strong run,” he said.

Waikato sales were down by 29 farms and Canterbury by 19 farms compared with the same three months last year.