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Rural property market hot |
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HOME >> NEWS >> Rural property market hot |
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 The rural property market is running hot on the back of high milk and grain prices in contrast to lurching city residential sales.
Dairy and arable properties have jumped 30 per cent in value in Mid-Canterbury this season with high quality farmland now worth between $40,000 and $50,000 a hectare.
In the past year Bayleys Canterbury has sold $200 million of mainly dairy and cropping property in greater Canterbury including several $10m-plus farms since Christmas.
Eight farms worth nearly a total of $114m have been sold in Mid-Canterbury by PGG Wrightson since December. The last time PGG sold this many properties in the area was in 1996 when they were worth $2m to $3m each.
About $100m of Ashburton sales were made by Hastings McLeod Real Estate in February and March, including some joint agency transactions. The agencies are confident more listed farms will sell quickly.
Dairying is driving the hot market but the often overlooked arable boom has generated high interest in cropping land that can also help feed the rising cow population.
PGG agent Robin Ford said more sales of Mid-Canterbury land suitable for dairying or cropping were close to being clinched. "There is no question the market for arable and dairying is still extremely strong because of the (high) commodity prices. Well-watered properties are moving and good water is critical."
Rural sales have picked up in line with rising Fonterra payout forecasts.
Ford said the signals were bright for a rising market with the Fonterra payout at a high $7 for next season, feed wheat prices moving from about $350 a tonne a year ago to $500 and seed ryegrass contracts doubling to $2.20 a kg.
While building is tightening in the cities, dairying conversions as many as 300 nationally this year require new milksheds, staff housing, lanes and fencing.
Bayleys Canterbury chief executive Scott McCrea said strong demand would hold up for the rest of the year.
"The Fonterra payout has gone up and we see no sign of it slackening off in any shape or form."
Bayleys' record year in farmland sales is highlighted by its Canterbury rural agent, Geoff McBride, winning the company's top salesman award, a title usually held by Auckland agents.
Hastings McLeod Real Estate principal Paul Cunneen said people without a background in farming were entering the rural property market.
"City people are getting involved in syndicates to round their portfolios off because other things are not so attractive," he said.
"The capital gains are attractive and now people can get a strong income from dairying."
He said rural and rural and city syndicates were being formed to buy $25m properties, the size of a small listed company.
AT A GLANCE
Top PGG Wrightson sales in the past six months, excluding GST
A 523ha Seafield arable farm with water consents, in February, for $21m.
A 460ha dryland Dorie farm, with good arable soils and consent to drill and take water, in February, for $18m.
A 360ha dryland Methven farm, in December, for $14.6m.
A 291ha spray-irrigated Barrhill arable farm, for $12.16m.
A 214ha spray-irrigated Hinds dairy farm, for $10m.
Source: http://www.stuff.co.nz/ |
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