Rural land prices in the Canterbury region have surpassed their pre GFC highs according to latest results reported by the Real Estate Institute of New Zealand (REINZ).
The REINZ sales data for the three months ending March 2015 shows the median sales price of rural land to have reached $31,826 per hectare surpassing the previous high of $31,126 per hectare registered in the opening quarter of 2009. While the median sales value can be volatile due to the relatively limited number of sales and the wide variety of different farm types, the latest figure continues the trend of increases in value prevalent since mid 2011, when land values reached their post GFC low.
As the above graph shows median values per hectare declined to approximately $15,500 in mid 2011 and have doubled between then and the opening period of this year.
While values have now surpassed pre GFC levels, sales activity has remained more subdued. Although still well ahead of the levels of activity experienced over the 2009 to 2011 period they remain behind those which were apparent leading up to the last cyclical peak reached in early 2008.
In mid 2014 the rolling annual sales volume reached just under 250 sales and remained at similar levels throughout the year. The opening quarter of 2015 has seen a reduction in sales, no doubt reflecting the impact of lower dairy prices and the drought which, at its peak, affected the entire region. Read more...
Impact of dairy downturn
Following a record dairy payout in the 2013/2014 season, dairy farmers have seen forecasts for the current season regularly reduced in line with retreating commodity prices. The current forecast sits at $4.50 per KgMS.
A final payout at this level would result in a reduction of approximately $7 billion in dairy farm income compared with last season.
Combined with a previously announced estimated dividend range of 20-30c a share, the forecast amounted to a cash payout of $4.70 to $4.80 for the current season – below DairyNZ’s estimate of break-even for most farmers of $5.40 a kg. Read more...
Sheep/dairy shift continues
The latest agricultural production statistics released by Statistics New Zealand show sheep numbers across the country to have fallen to their lowest levels since the Second World War.
Across New Zealand sheep numbers fell to 29.8 million as at June 2014 a fall of 3% over the June 2013 figure. The decline was led by the Canterbury region where sheep numbers fell by 255,000 from 5.22 million to 4.97 million. The latest figures continue the trend apparent since 2010 when the total number of sheep stood at 5.65 million. Read more...