Rowena Duncum from The Country had her monthly catch-up with Peter Newbold, General Manager of PGG Wrightson Real Estate to dig deep into the rural property market.

So how is rural New Zealand sitting? Peter believes 2022 finished strongly, especially December. A lot of things finished off and completed. So a good space for rural. The only area you might say struggled last year was horticulture. Will be interesting to see how that plays out in the coming months. Lifestyle and residential was challenging. It's in a space where values are being reset. It's taking place or it HAS taken place. There's lots of negative press around economic issues which is having a play in that residential and lifestyle market.

The other interesting thing which could be positive for rural New Zealand is that probably for the first time in two or three years, PGG has sold a large number of high value farms and have a number under contract - probably twenty million plus. That suggests a lot of confidence that people still see rural as a good place to either expand into or add to what they've got.

Rowena highlighted feedback she'd received over summer expressing delight that neighbouring properties in the area or properties they'd heard of in their district had actually sold to farmers groups - not to overseas buyers, not to carbon farms. Peter agrees it's a pleasing development. A number have still gone to forestry - which is great for the vendor, personally sad for New Zealand.

Rowena asked Peter what else he'd noticed over the summer break. According to Peter they've completed a lot more appraisals and are probably putting more listings onto the market in February which he sees as encouraging. As people start to understand where values sit, we'll start to see those property sales move on.

Finally Rowena asked Peter to polish his crystal ball and share his outlook for the year. He thinks rural sales will continue on. You might see different regions come to the fore. The sheep and beef sector will still be underpinned by the forestry. The unknown property at the moment is 'round horticulture and kiwifruit. Probably won't get a good take on that until four to six weeks' time. The other critical piece is that as vendors expectations become more realistic, you'll see more transactions. The market's not gonna boom. But he expects good rural sales. The residential and lifestyle market will slowly move forward. But Peter emphasises that the critical thing is that people need to be realistic. Otherwise it won't sell. On the rural side there are probably less buyers at the moment. They're qualified but there's less of them. Vendors need to be aware of that.