Farm sales increased 109% in the March quarter it doesn’t necessarily signal the start of a boom.
“Sales over the three months to March reflect the strengthening of the rural economy, bolstered by favourable growing conditions, very good levels of production, solid market returns and a positive climate for borrowing,” said Brian Peacocke, rural market spokesperson at REINZ.
All regions, apart from the Hawkes Bay, recorded an increase in sales in the March quarter compared with a year earlier. Canterbury showed the largest increase, up 39 sales, followed by Waikato on 38, while the Hawkes Bay dropped 4 sales.
“Irrespective of the above, a note of caution is clearly emerging as the industry prepares for winter, with the expectation that income levels may moderate next season, and given seasonal variabilities, it is unlikely the combination of current benevolent factors will be repeated for some time to come,” said Peacocke.
Critics of land sales to foreigners argue that they price locals out of the market.
The media release doesn’t mention the nationality of the buyers but there haven’t been many Overseas Investment Office approvals for sales this year so most of the properties must have been bought to locals.
Among those sales would have been ones engineered by one of the major banks which has been carefully and quietly sorting out heavily indebted customers who weren’t going to be able to farm their way out of their problems.
The bank has been working under the radar on purpose, usually selling to neighbours, sometimes doing some much-needed maintenance before looking for buyers.
Had the receivers for the Crafar Farms followed this example, the chances of properties being sold individually and to locals would have been much greater.