Market Update Winter / Spring 2020

Welcome to our Rural Market Update Winter / Spring 2020

Spring has sprung – and I suspect that this year, it’s going to be pretty welcome for everyone.
These days we tend to be looking for good news wherever we can get it, and I’m happy to say I have some in this update. Thanks to the mild winter, conditions are great on farms and the rural real estate market is seeing huge amounts of activity, with enquiries for all parcels of land.
During our winter period, rural sales were worth $62 million through the Waikato and Bay of Plenty, including both dairy – horticulture and dry stock properties. That’s better than it has been for the same period in the last two years.
That might come as a surprise. I’ve certainly been hearing from prospective sellers that they don’t think there will be buyers out there in these uncertain times. But it couldn’t be further from the truth.
I suspect it’s largely because interest rates are still sinking lower and lower every quarter, and term deposits are becoming less attractive. People are looking for safer havens for their investment dollars, and with food security being at the top of the priority list for consumers right now, agriculture is a good proposition.
There’s definitely a perception out there that the banking sector isn’t interested in supporting agri deals. I don’t believe that. If the property is a sound proposition and economic investment then there’s still money for it. But that tougher lending environment is helping to stabilise land values, to an extent.
There is some concern from a production point of view that farmers might need to capture the major seasonal production before Christmas. Based on this winter it feels like the summer might be warm and another dry summer like last year would be fairly significant. Certainly the new season is off to a rip-roaring start, with milk production up six percent or so.
The upshot of all this is that there are more buyers than sellers out there, so if you’re thinking of selling it’s a better time than you’d imagine. It still all comes down to compliance and preparation – lots has changed in the last six months, but not that. Make sure all compliance aspects are ticked off and you’ve got all that information to hand.
There are still a couple of grey areas. I’m mainly thinking of the fresh water policy, which is yet to be tied down to exact parameters. It’s possible that those will depend on the election result, but I don’t buy in to the noise that it’ll finish farming in New Zealand. Common sense typically prevails in these cases, and they generally end up sorting things out that needed it.
What’s really in your favour is that, with the partnership between Property Brokers and Farmlands, our rural team is one of the biggest in the country. It covers both islands, every region, and all markets. The buyers are there, and we can find them. You’ll also have plenty of technical support when it comes to getting your compliance sorted out.
So the main question is – what will you do after you’ve sold up? No need to keep dreaming about it, give me a call and let’s make it happen.

Regards
Ian
AREINZ 0274 925 878

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