Sales activity in the Northland Region has increased sharply over recent months bolstered by an influx of buyers from elsewhere in the Country.
The uplift in sales activity is a strong indication that confidence in the future of New Zealand’s rural economy has trumped concerns over volatility within commodity markets and impending increases in regulation aimed at safeguarding the environment.
Market activity in the Northland Region has traditionally been driven by local buyers. Over the last 12 to 18 months however, buyers from outside the Region have been far more prominent accounting for approximately 50% of all sales. The Real Estate Institute of New Zealand (REINZ) recorded 159 farm sales within the Northland Region in the year to June 2014, the highest annual number of sales completed since the September quarter of 2008 and 137% up on the cyclical low of 67 sales recorded in the year to June 2011.
The greater market activity evident in the region is putting upward pressure on prices. REINZ statistics show the median sales price per hectare for all farms to have reached $14,624, up from $10,329 a year earlier.
Another indicator of the current interest in the Northland market is the fact that sales have continued over the winter period, traditionally out of season sales are extremely rare however over the winter months of 2014 five or six major sales have been completed.
There is no doubt that the dairy sector has driven the increase in interest within the region however, there has continued to be activity in drystock and hill country farms. The Region offers a diverse range of soil types and land contour which has a profound effect upon the level of purchaser inquiry which a farm is likely to command if brought to market. Competition for farms within prime areas, particularly Hikurangi and Ruawai however, is particularly intense. As
stated above this competition has driven up prices.
The outlook for the year ahead also remains generally positive. While dairy prices have declined sharply from record highs over the course of this year, meat and wool prices remain at elevated levels. Winter storms have led to isolated flooding, however this has generally been restricted to areas of low lying poorly drained land. Across a majority of the Region, and on the east coast in particular winter growing conditions have been extremely favourable and pasture is in first class condition.
Download the full Property Research Report here.