Strong outlooks in dairy and horticulture, alongside generational change in the sector, are supporting continued activity in New Zealand’s rural property market.
PGG Wrightson general manager of livestock and real estate, Peter Newbold, said succession was top of mind for many in the sector.
“If you look at the age group of our existing farmers in general terms, we’re getting to that point where it has to take place, and it will take place,” he told The Country’s Jamie Mackay.
Encouragingly, the next generation is already coming through, with strong representation at the Beef + Lamb New Zealand Awards in Christchurch last night, which Newbold attended.
“I thought it was a wonderful night, and it was interesting the amount of young people there,” he said.
“I thought that bodes well for rural New Zealand.”
He also noted the strong mix of young men and women being recognised, saying “the intellect in the room was pretty outstanding”.
In the dairy sector, there was expansion in Canterbury, where Newbold said demand remained strong and interest in support blocks was high.
“I actually think we’re going to see more activity as we move into spring.”
Pictured: Well Equipped West Otago Dairy Farm | 465 Adam Fleming Road, Crossans Corner
He said broader momentum was also being driven by people outside the industry wanting to get in.
“So those corporates or large entities or individuals with significant wealth are wanting to get involved in the dairy sector.”
Newbold said this, along with strong outlooks for dairy, meant the sector was “looking really positive”.
Kiwifruit is also experiencing a surge in outside interest.
“What we’re seeing is a lot of movement between key players in the industry, and then, also a little bit like dairy, there are people wanting to get into that sector,” Newbold said.
The outlook for kiwifruit was robust, he said, another parallel with dairy.
Pictured: Gold Kiwifruit, Green Thinking! | 778 Maniatutu Road, Pongakawa
“So again, there are two sectors there which are really strong, and the outlook looks good moving forward.”
As for sheep and beef, Newbold said it was about people “getting their head around where the values are”.
“I think if that takes place, then we’ll see sheep and beef follow on very similarly to dairy.”
Newbold said while returns for lamb, beef and wool were improving, property values had yet to follow, particularly compared with dairy.
He said the loss of carbon forestry support meant farms were now being judged on their underlying returns, limiting upward pressure on prices.
“The forestry underpinning has gone, and people are looking at it on a return basis.”
This has shifted the market back to fundamentals, with values yet to reflect improving returns.
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