Lower Waitaki Valley Dairy Farm Transaction Gives Positive Signals
A spray-irrigated Waitaki Valley dairy farm sold in late June for $8.35 million, potentially re-igniting the market for dairy property.
Dave Heffernan of PGG Wrightson Real Estate, Oamaru marketed the 178 hectare Hilderthorpe farm, which produced 250,000 kilograms of milk solids from 580 cows in the 2019/20 season. He says few dairy properties have sold in recent months.
“Although recent transactions have been rare, the sale value of around $47,000 per hectare is close to what this farm would have made two years ago.
“Listed for sale in January, the property sold to a locally-based purchaser. We also received interest from several other parties, indicating that farms with low cost reliable water, good soils and proven production should achieve values that satisfy realistic vendors,” he said.
John Sinnamon is North Otago branch manager for PGG Wrightson Real Estate. He said the Hilderthorpe transaction was a positive signal to the market previously in hiatus.
“Several factors, including mycoplasma bovis and banks adhering to tighter lending criteria, have increased recent levels of buyer caution. However, this sale shows they are becoming more attuned to current market expectations, while vendors are willing to take innovative steps to achieve the best outcome.
“In the current market you have to be more innovative to achieve a sale. For example vendors might opt to retain a proportion of equity in a farm for a limited term. This sale proves that realistic vendors can reach agreement with motivated purchasers, which is necessary for the rural property market to remain active. It also shows purchasers remain interested.
“Current indications suggest that the spring market for listings is shaping up to be very busy with a range of local sheep and beef, arable and dairy farmers readying their properties to offer to the market,” he said.
Dave Heffernan, 027 215 8666
John Sinnamon, 027 457 0710