March rural data: REINZ Reveals Farming Fortunes in Fluctuating Markets

5 April 2024

The Real Estate Institute of New Zealand (REINZ) has just unveiled its latest report on farm sales, a significant resource that provides valuable insights into the agricultural real estate market for the quarter ending March 2024. This data is a comprehensive overview of the notable trends and shifts within New Zealand's farming landscape.

REINZ's data shows a clear shift in the market dynamics. For the three months ended March 2024, there were 33 fewer farm sales (-13.3%) compared to the same period in 2023. This decline is part of a trend, with 215 farm sales recorded for the quarter, a decrease of 5.7% and 13.3% compared to February 2024 and March 2023, respectively.

The decline in farm sales is not limited to a single sector. In the year leading up to March 2024, 957 farms were sold, marking a decrease of 387 sales compared to the previous year. This decline is spread across various farming sectors, with Dairy farms experiencing a 37.3% reduction, Dairy Support farms down by 10.9%, Grazing farms decreasing by 38.3%, Finishing farms by 28.3%, and Arable farms down by 2.2%.

REINZ rural spokesperson Shane O’Brien said the sales data showed an expected trend as farmers cope with a dry summer, lower farm incomes and higher farm costs and interest rates. The better than expected farm gate milk price and some positive Global Dairy trade results hasn’t managed to increase sales activity in the dairy sector as farmers take a cautious approach to farm investment at this time.

The median price per hectare for all farms sold in the three months to March 2024 was $25,130, showcasing a 15.4% decline compared to the same period in 2023 and a 12.6% decrease compared to February 2024. The REINZ All Farm Price Index, which adjusts for differences in farm size, location, and farming type, decreased by 0.2% compared to February 2024 and 8.8% compared to March 2023.

Regionally, the market shows a diverse picture. While three areas experienced an increase in farm sales for the quarter ended March 2024 compared to the same period in 2023, with Gisborne/Hawkes Bay and Wellington showing some growth, Waikato and Otago recorded significant decreases. Seven regions witnessed increased sales compared to February 2024, with Wellington and Southland demonstrating the most notable upturns. This regional variation highlights the dynamic nature of the agricultural real estate market in New Zealand.

Breaking down the sales distribution, Finishing farms accounted for 25% of all sales, followed by Grazing farms (24%), Dairy farms (22%), and Horticulture farms (7%), collectively representing 78% of all sales during the quarter.

In terms of individual sectors:

Dairy Farms: The median sales price per hectare for dairy farms in March 2024 was $34,730, a 12.3% decrease over the past year. The price per kilo of milk solids declined by 15.5% compared to February 2024.

Finishing Farms: Median sale prices per hectare for finishing farms dropped to $29,605, reflecting a 17.8% decrease over the past 12 months.

Grazing Farms: Median sales prices per hectare for grazing farms increased by 7.1% over the past year, reaching $13,270 for March 2024.

Horticulture Farms: The median sales price per hectare for horticulture farms decreased by 43.2% over the past year, reaching $208,690 for March 2024.

The REINZ Dairy Farm Price Index decreased by 5.1% in the three months to March 2024 compared to February 2024 and 5.9% compared to March 2023.

Overall, the data released by REINZ provides valuable insights into the trends shaping the New Zealand agricultural real estate market, offering stakeholders a comprehensive understanding of the current landscape and prospects.

For more detailed information and insights, please refer to the full report available on the REINZ website.

About REINZ:

The Real Estate Institute of New Zealand (REINZ) is the professional body representing the real estate industry in New Zealand. It provides up-to-date, accurate information on real estate trends and statistics to inform industry professionals and the public alike.

For media queries, please contact [email protected]

For further details and insights, please visit www.reinz.co.nz

Real Estate Institute of New Zealand

For more real estate information and market trends data, visit www.reinz.co.nz. For New Zealand's most comprehensive range of listings for residential, lifestyle, rural, commercial, investment and rental properties, visit www.realestate.co.nz - REINZ's official property directory website.

Notes to Editors:

The information provided by REINZ in relation to the rural real estate market covers the most recently completed three-month period; thus, references to January 2024 refer to the period from 1 November 2023 to 31 January 2024.

The REINZ Farm Price Indices have been developed in conjunction with the Reserve Bank of New Zealand. It adjusts sale prices for property specific factors such as location, size and farm type which can affect the median $/hectare calculations and provides a more accurate measure of farm price movements. The REINZ Farm Price Indices have been calculated with a base of 1,000 for the three months ended March 1996. The REINZ Farm Price Indices is best utilised in assessing percentage changes over various time periods rather than trying to apply changes in the REINZ Farm Price Index to specific property transactions.

From March 2021 there has been a change in the methodology for calculating rural statistics. To date, the rural statistics have referred to a Return Period which is the month in which a sale record was submitted to REINZ. Going forward, the rural statistics will refer to an Unconditional Month i.e., the month in which the sale went unconditional. This change in methodology ensures that sales that took place in April, for instance, are recorded against April even if they were submitted to REINZ late. The change also brings Rural statistics calculation into line with the Residential statistics calculation, where the Unconditional Month approach has been used successfully to calculate Residential Statistics for several years now. The Unconditional Month methodology also ensures that the most up-to-date state of the REINZ database is reported at the time the data is released with revision of prior months’ statistics often occurring to reflect the submission of late data or sale amendments that took place after the prior statistics release.

In addition to the calculation period change there are two additional changes to the data worth noting:

1. 12 Districts have been replaced by 13 Regions. These are consistent with the parts of the residential press release and it has been done to be consistent with regional definitions outside REINZ e.g., Statistics NZ
2. Dairy Support is a new farm category and we now have the ability to separate Lifestyle Blocks into Bareland and Farmlets.

If you have any questions regarding this change in methodology, please email [email protected].