13 Mar 2009

Prospects of stability seen in rural real estate

12:53 pm on 13 March 2009

The Real Estate Institute hopes that the latest farm sale figures are an indication that some stability is returning to the rural property market.

Farm prices for the three months to February, with a median of more than $1.2 million, have almost returned to the level for the corresponding period in 2007.

However, that's well below the median price of more than $1.7 million reached when prices peaked a year ago.

REINZ rural spokesperson Murray Cleland says that needs to be seen in the context of last season's record dairy payouts and the impact that had on the demand and prices for farm land.

He blames the reduced dairy payout and the bleak economic outlook for more than halving the number of farm sales, compared with a year ago.

The latest figures are also down again on the January period.

However, Mr Cleland sees the price lift in Fonterra's latest on-line milk powder auction as another indication that conditions influencing the demand for farms may be starting to improve.