New Zealand’s weather may be playing ball for the primary sectors, but global storms are brewing, signalling challenges ahead for the rural property market.
This is according to Peter Newbold, PGG Wrightson’s General Manager, Livestock and Real Estate.
Newbold told The Country’s Jamie Mackay that there was solid momentum and favourable conditions across all sectors at the moment.
“It’s really positive on all fronts, and sales have been strong and probably better than I thought during the month of March.”
While Newbold was loath to be negative, he said it was hard to ignore what was happening overseas.
“I guess the challenge coming up at the moment is what happens offshore in the Middle East,” he said.
“The longer that’s in play, I think the more it will affect property sales and, well, actually a whole lot of things.
“So I guess we’re probably in a bit of limbo at the moment.”
While property values hadn’t changed much, Newbold said he’d noticed an opening in the market.
“There’s probably not a lot of what I’d call good rural properties out there at the moment.
“So there’s an opportunity for those who want to list and sell.”
Meanwhile, Fonterra’s capital repayment from its sale of Mainland to Lactalis was a welcome cash injection for the dairy sector.
Analysts estimate the sale delivered about $400,000 tax-free to the average Fonterra farmer.
Newbold said he thought this had had a “huge impact” with the funds potentially already spent on property, debt, or succession plans.
“It’s also flowed through to, I believe, a lot of the communities that support that rural network.”
“If you add that into good farmgate prices and weather, etc., it’s just been the icing on the cake.”
While this, along with six positive results in the Global Dairy Trade auction, had helped with demand, it had also led to a property shortage, Newbold said.
“The challenge we’ve got is there’s not a lot of stock out there and...not a lot of availability out there, but there’s definitely a lot of people who want to get into that marketplace or add to what they’ve got.”
Newbold said the sheep and beef market was also gaining momentum.
He’d noticed the South Island was more buoyant than the north, although traditional areas such as King Country had always been strong.
He said buyers were far more value‑focused in higher‑priced sales.
“The only comment I’d make there is once you get north of $10 million, then people spend a lot more time naturally on due diligence, etc., and to be honest, are looking for a return.”
Horticulture was going well, with renewed interest in kiwifruit and apples, but carbon farming had affected forestry.
“If you go onto the web and have a look at what’s available, it’s reduced,” Newbold said.
“If I take our business, for example, the amount of transactions that are taking place in that area is minimal...it’s definitely slowed dramatically versus what it was like two years ago.”
As a result, forestry was no longer a major focus, with attention instead on other parts of the rural property market.
With strong local fundamentals and global factors at play, knowing when and how to act is key.
Our local PGG Wrightson Real Estate agents work closely with farmers and growers to help them navigate changing conditions and move forward with confidence.
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