Canterbury remains the 'food bowl' of New Zealand
Canterbury remains the ‘food bowl’ of New Zealand
Strong farm product prices, low interest rates, and a good growing season so far mean many farmers are already reporting strong profitability, which bodes well for the rural property sector as a whole.
Shane O’Brien, Director of Colliers Rural and Agribusiness in Canterbury, believes Canterbury is still at the forefront of the rural market in New Zealand, given its diversity of land uses, availability of reliable irrigation water and versatile soils together with many internationally acclaimed supporting businesses and infrastructure.
“Canterbury remains New Zealand’s food bowl and this reputation will ensure demand for land suitable for food production will remain strong despite uncertain international pressures such as Brexit and US political issues.“
O’Brien says that while the local market has begun 2019 somewhat cautiously, with fewer sales than normal, the outlook is positive.
“The lack of overseas interest, coupled with a limited number of local buyers, has resulted in longer selling periods given the good selection of properties in dairying, dairy support, sheep and beef as well as deer.
“Buyers do have good choice and, as such, sales are taking time to conclude.
“Increased awareness around environmental compliance and requirements of ECan’s recent Plan Change 5 are seeing buyers becoming far more diligent around their buying decisions and engaging with consultants to ensure the property’s farming future is sustainable.
“This increased compliance, along with banking requirements, is seeing sales take longer than usual.”
Meanwhile, national figures released by the Real Estate Institute of New Zealand (REINZ) show that
370 farms were sold in the three months to February this year, down 14 or 3.6 per cent from 384 in the three months to February 2018.
The median price per hectare for farms sold was $22,462 in the three months to February, down $5,061, or 18.4%, from $27,523.
A total of 1472 farms were sold in the year to February 2019.
The REINZ All Farm Price Index, which adjusts for differences in farm size, location and farming type, unlike the median price per hectare, rose 1.2 per cent in the three months to February versus the three months to January 2019.
Compared to February 2018 the REINZ All Farm Price Index rose 12.9 per cent.