The price of farms sold doesn’t reflect the supposedly weakening economy with record median price for dairy farms at $4m last month.
The dairy boom is having a flow on effect to other prices with the national median for all farm prices at $1.8m, up by more than 50% on May last year.
Real estate agents at the fieldays told me they had no problem selling farms, but there were more buyers than sellers so they’re having problems finding farms to sell.
However, 72 Otago farms sold in May, up from 66 the previous month and 39 in May last year. Of those farms 31 were finishing and 28 grazing, which are sought after by dairy farmers. Five were special, five dairy and one each arable, forestry and horticulture.
In Southland, 108 farms sold in May, up from 103 in April and 96 in May 2007.
The median Otago farm price was just above the national median but eased to $1.87 million in May, from $1.96 million in April, but still up on the $1.16 million in May 2007.
In Southland the median price rose to $2.41 million in May, up from $2.37 million in April and $1.30 million in May 2007.
REINZ rural spokesman Peter McDonald said while fuel price rises will hit farming hard that’s not yet reflected in property sales.
Mr McDonald said the main drivers for the rural strength were city investors wanting to get into farming, and dairying in particular, as well as farmers wanting to extend their landholdings and amalgamate properties where possible.
“It is clear that farmers are taking the view that now is as good a time as any to amalgamate properties to achieve better economies of scale.”