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Rural Real Estate Report: Farm Prices on the Rise

January 2022

 

Jamie Mackay from The Country spoke recently with Peter Newbold, General Manager of PGG Wrightson Real Estate.
Jamie speculated whether the recent rise in the forecast milk price from Fonterra was influencing the price of dairy farms.

Newbold confirmed that over the last couple of months there had been lots of activity in the rural property market.
In fact December had been the biggest month he’d seen in a decade.
He did add though that the dairy side had been a little bit quieter than sheep, beef, grazing and horticulture.
Newbold put this disparity down to the complexity of owning a dairy property and the need for a lot more due diligence when weighing up an investment.

Jamie also raised the issue of carbon farming and its propensity for taking over valuable pastoral land.
Newbold agreed that while carbon farming is good for the vendors, there’s no question it’s over-inflating the value of rural properties and putting younger farmers out of the market. In his view, there’s a pressing need to revisit the rules and regulations around carbon farming.

Jamie finished up by discussing horticulture – especially kiwi fruit.
He asked Newbold why we’re seeing a large number of kiwi fruit farms coming onto the market.
Newbold replied that there had been a real shortage over the last couple of years and kiwi fruit farmers had held on to their properties as returns had been fantastic – still are.
Now people are retiring, they’re looking at succession or they’re re-developing new blocks.
So a number of high quality kiwi fruit farms are coming to market.
There’s a lot of interest so it will be revealing to see where prices go. Newbold feels there might be a few more record prices paid.

Click the play button for the full interview.