Property Report: Strong demand for sheep and beef

Rowena Duncum from The Country touched base with Peter Newbold, general manager for livestock and real estate at PGG Wrightson to discuss the market situation.

Both agreed it's been a busy month with wet weather on top of lambing and calving. The first topic is the continued interest in sheep and beef properties. Peter says the market remains strong with interest from all sectors. Forestry is still underpinning it all but Peter senses that aspect is slowing a bit.

He emphasizes the need for good advice when buying or selling in the sheep and beef space as it's quite complicated and there have been a lot of changes.
Rowena wondered whether there was still a lot of interest in the carbon space. Yes, there is says Peter, and it's driving the values in sheep and beef. Vendors looking at succession or retirement feel that it's never been so good to sell a sheep or beef property.

As far as the dairy sector is concerned, it's a good time to list a lot of good properties coming to the market. Reasons for selling vary. It's often for succession or retirement or the feeling that it's time for a change. Good properties are naturally attracting good interest. One note of caution is that in some areas a large number of properties are coming to market at once. The obvious question is why are people putting properties on the market? Are they looking to exit the industry? Are they just not seeing succession coming through? Peter agrees that succession and retirement are definitely factors. Also, returns in rural New Zealand have been very strong. The values are there, maybe it's time to move on. Other vendors are looking at compliance costs and seeing that as a reason to sell. High demand is also an obvious market stimulant.

The discussion then turned to horticulture and Peter pointed out there has been a slow start to the season with very wet and cold weather in parts. The next two to six weeks will reveal where values sit. There is of course strong demand in the kiwi fruit sector.

To wind things up, Rowena touched on the high demand for grazing blocks. Peter points out there are two competing forces at work here. Traditional farmers are looking to increase their land holding with extra grazing. And a lot of people looking for a taste of rural New Zealand as a lifestyle choice. Grazing blocks are seen as a way to ease into that lifestyle by running a few sheep or cattle while staying relatively close to town. This space is sure to grow.

Peter hopes that things will settle down and the next generation of young farmers will still be able to get into the industry.

Click the play button for the full interview.