Bollard says some farms must sell

Real Estate agents’ phone have been busy since Fonterra announced an increase in its forecast milk payout.

Some calls have been from would-be buyers and a few have been from vendors wanting to take their farms off the market.

They’d been under pressure from banks but the increase in the payout has given them some respite.

The sharp drop in the payout last season provided a wake up call for farmers who had borrowed heavily and many will use the increased payout to reduce debt.

However, the increase might not be enough for everyone.  The Reserve Bank’s financial stability report says some farms are carrying too much debt and will be forced to sell some or all of their operations.

Very few farms have sold in the last few months because buyers have been holding back but that changed this week.

No-one rings a bell at the bottom of the market, but the number of calls real estate agents are fielding suggests dairy farms, and their prices, might be about to move again.

One Response to Bollard says some farms must sell

  1. pdm says:

    We have friends in Central Hawkes Bay who have had their farm on the market for about 15 months now. It includes and some of the best fattening country in Central Hawkes Bay and some very good rolling hill country. The farmers are well respected for the quality of their stock for many years and it is handy to town and only 35/40 minutes from Hastings..

    To my knowledge they have had two and possibly three sales fall through because the buyers could not get finance. I know one of the potential buyers and they are well respected people in the district and good farmers as well.

    Because we are away we haven’t seen our friends since July but suspect they may now have withdrawn from the marketfrom the tenor of emails.

    Like

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