Difference between prices not necessarily profit


A Canterbury farm bought for $5 million 14 years ago sold for $65 million last week.

Ealing Pastures was purchased in 2000 by a farm partnership made up of former South Canterbury Finance boss Alan Hubbard, Perth-based investment company Pullington and New Zealand-based couple Andrew and Rachel Morris. . .

          Today’s sale is a whopping 1300 percent profit. The farm had an estimated value of $60 million. . .

The difference between the purchase price and the price the property sold for is $60 million but that is very unlikely to be all profit.

The property was a Landcorp finishing farm might when it was bought and millions of dollars would have been spent in the conversion to dairying and other improvements.

It is probable the sale realised a considerable profit but it would not have been the $60 million difference between the purchase and selling prices.

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