18 Jul 2011

Farms sales up as prices fall

1:58 pm on 18 July 2011

The rural property market is continuing to climb out of the doldrums, with more farm sales, though at lower prices.

Latest figures from the Real Estate Institute show 393 farms changed hands in the past three months, about 30 more than the three months ending in May, and 90 more than were sold in the same period last year.

The median price has dropped to $15,568 a hectare compared to $17,772 per hectare for the three months to June 2010.

It is the lowest per hectare median price in a decade, and continues the downtrend seen since early 2009.

But the institute's rural market spokesperson, Brian Peacocke, says the lift in the number of farm sales is a sign that confidence is returning, among both buyers and sellers.

He says buyers, sellers and the banking sector have all made the point that values got too high and an easing in prices has seen increased sales.

Mr Peacocke says the most recent figures reflect an increase in grazing and dairy support properties, particularly in the lower part of the South Island.

Mr Peacocke says there are signs that the resurgence of interest in buying farms will continue into the spring, judging by inquiries to his and other real estate agencies.