Spring surge: Rural property market heats up as buyers return

Spring is looking promising for rural real estate sales, and the market could stay that way until Christmas.

This is according to Peter Newbold, General Manager, Livestock & Real Estate for PGG Wrightson.

“If you look at all the listings coming on to the market and the quality of them, if you look at the returns that sheep and beef and dairy and hort are getting, they’re really strong, so everything’s lined up," he told The Country’s Jamie Mackay.

There were also many genuine buyers around, which Newbold said hadn’t been seen for “a long time”.

However, high commodity prices didn’t mean that sellers could “crank up” their prices, he warned.

“I think they’ve got to always look at the yield.”

As for capital gains, Newbold said there hadn’t really been any movement for the past decade, and farmers were now buying on yield.

“There’s always the odd exception, and they’re the ones that get reported, whether it’s a unique property, or a neighbour’s bought it.

“But in general terms, the values haven’t moved a lot and I don’t think they will over the coming months because the purchasers aren’t prepared to pay over.”

Mackay pointed out the positives for potential buyers, including lower interest rates, and wondered if Fonterra’s proposed $4.22 billion deal with Lactalis could increase dairy farm sales.

“Everything is lined up perfectly at the moment; the only thing you can’t guarantee is the weather coming up,” Newbold said.

Interest rates, on-farm costs and returns were all positive, which Newbold said boded well.

As for the Lactalis deal, Newbold said, the funds could be dispersed between rural sales, debt reduction, and succession planning.

Pictured: Seldom available - 223ha Tier One dairy farm in Mid-Canterbury offered for sale by auction on 15 October.

“I think you’re going to see a mixture there, but definitely we’ll see another upside in sales.”

Newbold was talking to Mackay from China, where he’s currently promoting New Zealand velvet and will soon head to South Korea.

“Our goal is to secure favourable pricing for all the farmers out there.”

He was impressed by what he’d seen so far.

“I don’t think, until you’ve been there, you quite appreciate the size, what goes on, how quickly they do things, the infrastructure, the people.

“It’s just an amazing country.”

With strong buyer interest and promising returns across the sector, now is a good time for farmers to consider their options.

PGG Wrightson Real Estate has the expertise to help rural vendors achieve results.

Click here to find out more about selling with PGG Wrightson Real Estate.