Market Update Summer 2020
It’s my first market update for the year! I hope your 2020 is going well, despite all the recent coronavirus upheaval.
I’m pleased to say that last year’s merger between Farmlands and Property Brokers is proving really successful. Clients have repeatedly told us how helpful it is to have access to both Property Brokers’ specialist marketing people and the technical people at Farmlands.
In terms of sales, we’re happy with how things have gone over the summer. We’ve had some good results, particularly with selling maize support properties. Spring farm sales for the Waikato market totaled $211m with 60 farms sold for the 3 months to end of the December, 11 dairy farms sold in December too. So, while the market has its share of challenges importantly sales are being made and at realistic levels.
It’s unfortunate that we’ve run into this dry patch, though. It’s caught the whole country, and definitely dulled down that feelgood factor. And there will be knock-on effects for the autumn market.
The market’s still very much in operation, but most of the deals being done are from last spring’s listings. It’s become crucial for vendors to have all the paperwork in place and evidence of regulatory compliance. Buyers all want a sustainable investment, and banks won’t lend a cent on properties that haven’t got all their checks and balances in place.
That makes compliance and documentation absolutely vital. It blows me away that people still think they can get away with their property not being totally compliant or missing information like nitrogen reference points, then wonder why it’s not selling.
All that said, transactions can and will be done in the autumn. The drought is definitely making people are more reluctant to list because, let’s face it, their property isn’t looking its best – but then nobody’s is. It’s true that from a presentation perspective it’s not ideal, but if the farm is a good proposition there will be a buyer.
So if you’ve been thinking about listing a property, but you haven’t sorted out all your documentation, do it now. Then in spring you can get a marketing campaign underway and be ready to sell with no holdups. A number of my vendors are currently doing just that – it makes for so much less stress at selling time!
If you want the best price the market will deliver, but it’s no longer automatic. You’ve got to do the legwork and add value by supplying that critical information.
That might sound like a scary amount of work, but we’re here to help! The team at Farmlands can provide technical support as we plan your marketing strategy and campaign. The market is definitely still delivering fantastic outcomes, but adding value requires more preparation. It’s no longer as simple as setting an auction date and watching the magic happen.
What’s really positive is that the historic volatility associated with commodity cycles appears to have moderated a lot, even with all the recent market upheaval. The long-term farming outlook continues to support current investment decisions as international demand for our quality NZ produce remains stead-fast.
And of course, we’re always ready for a chat about how we can help you market your property, or make your next purchase. Just give me a call today on 027 492 5878.
Have a great autumn.
Ian Morgan AREINZ