Property report: Momentum remains subdued in the rural market
May 2024

Property report: Momentum remains subdued in the rural market

 Momentum in the rural property market remains subdued, with farm sales for the calendar year significantly down.

PGG Wrightson General Manager of Real Estate, Peter Newbold, put that figure at around 30 per cent.

“Some areas are varied, but that’s [representative of] a billion dollars,” Newbold told The Country’s Jamie Mackay.

“That’s a lot when you look at the rural marketplace.”

Despite this, Newbold said PGG Wrightson had experienced its best trading month in over a year – a move he attributed to a combination of factors.

“With all property sales, a lot of them are taking a long time to put together…there’s a lot of due diligence taking place and there’s been a little bit more activity.

“You put all those three things together after Christmas and suddenly everything sort of compounded into the month we’re dealing with now,” he said.

Looking ahead, Newbold identified an ongoing need to balance property values with vendor expectations.

He felt purchasers were willing to buy, just not at the prices that were being currently set.

“The values are too high - and that’s not me wanting to drive the market down - it’s just reality.

“It’s absolutely a buyer’s market at the moment.”

Newbold had noticed an increase in listings heading into winter, outside the traditional spring listing period – something he said, “could be thought of as a bit of a strange thing”.

However, inquiries and activity were still looking strong heading into spring.

“That’s positive. As long as we can get those values right, I think we’ll see some momentum.”

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While the next few months ordinarily yield very few dairy farm sales, Newbold believed the early positive payout forecasts for the upcoming season boded well for the sector.

“Once we get through that winter and into the spring, I think probably there’s more opportunities in that sector early on, than any of the others,” he said.

The past 18 months have been relatively quiet on the kiwifruit front, which Newbold again felt related to the value proposition and a need for the industry to find a market-adjusted price per canopy hectare.

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Similarly, lifestyle block sales had slowed significantly post covid and in line with the drop in farm sales.

Newbold said if farm sales weren’t going through, then there wasn’t an increased movement of rural people from farms to lifestyle blocks.

“Let’s say rural people are wanting to move off the farm…if they’re not selling their farms, then they don’t move into town.

“Add in [high] interest rates and where people’s mortgages are at the moment - that’s also holding things up.”

However, Newbold remained optimistic of a sea-change in the future, with movement in interest rates and on-farm costs.

“If there’s amendments there, then suddenly the real estate market will move.

“Things aren’t all doom and gloom.”

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