Farm succession and an ageing workforce are set to drive a $150 billion surge in rural property sales over the next decade, according to Rabobank’s Changing of the Guard report released last year.
PGG Wrightson Livestock and Real Estate general manager Peter Newbold says the scale of that shift was significant.
“$150 billion; you divide that over a decade, that’s a lot of farm sales,” he told The Country’s Jamie Mackay.
He said the ageing rural workforce was “a big deal”, but there were positives on the horizon.
“I think we’re going to see a lot of activity as we move forward over the next two or three years.
“One thing that’s really good about it is we’re going into a period where farm returns are solid, and so that really helps the whole succession retirement piece, which is critical.
”Rabobank’s latest Rural Confidence survey shows sheep and beef farmers are the most confident, and also among the oldest, suggesting a wave of sales could be on the horizon.
Newbold said activity was expected to ramp up, particularly heading into spring.
“I think we’re going to see a lot more activity in sheep and beef, and I think we’ll see sales that will equal volumes that have taken place in the dairy.
”Meanwhile, interest is cranking up in dairy and kiwifruit, and Newbold said much of the activity remains locally driven, with additional interest from larger-scale buyers.
“A lot of the sales that are taking place at the moment are generated by neighbours or within the region or the next-door region.
“It’s not just corporates – it’s those large farming family entities over the last 10 or 15 years that have acquired a number of properties, and I think they’re probably the big movers.
“Then you add in the dairy piece, it’s significant.”
Interest is also rising in smaller farming properties, with increasing activity in the 20-90-hectare range.
“Definitely, if you look over the last six to eight weeks, there’s been a large increase right through the country in that space,” Newbold said.
While returns are good for most sectors, there are clouds on the horizon, including higher interest rates and uncertainty from the conflict in the Middle East.
However, Newbold reckoned rural New Zealand was still going strong.
“I actually think it’s going better than people think,” he said.
“If you look at red meat, dairy, kiwifruit, it looks really solid, so anyone who’s going to come in and invest in a property or look out over the next few years has to feel confident.”
As a new generation steps into the sector and succession plans begin to take shape, many farming families will be faced with important decisions in the years ahead.
Our local PGG Wrightson Real Estate agents are hereto provide trusted advice and help you navigate your next move with confidence. Connect with your local agent.
Related posts
Back to News & Publications
