16 May 2011

Strong lift in farm sales could lead to market change

6:00 am on 16 May 2011

There has been a strong lift in farm sales for the first time in three years.

The Real Estate Institute says 290 farms changed hands in the three months to the end of April.

That compares with 190 in the three months to the end of March and 267 in the three months to the end of April in 2010.

The institute says more than half of the sales were in the month of April alone, the largest number in a single month since July 2008.

Most of the increase occurred in Otago and Southland as farmers sought winter grazing for dairy cows.

The Real Estate Institute says it's too early to tell whether the increase marks a significant turnaround in the rural property market.

Its rural property spokesperson, Peter McDonald, says there's been a lift in rural confidence, which, coupled with high commodity prices, could be leading to a change in the market.

Mr McDonald says sales have dropped from about 2500 farms sold each year down to about 700 farms sold each year for the last couple of years, but the year ending this month 900 farms have been sold.

While farm sales have picked up, he says farm prices have remained the same.