After a two-year to three-year lag, listings and price tags are on the rise.
The big-spenders of the golden years are absent, but agents indicate that dairy farms worth $5million to $10million will be appearing on the market soon.
PGG Wrightson Real Estate manager Peter Newbold said a lot of stars were lining up for a more positive market after a long trough.
‘‘We saw in the last six months a definite increase in sales and some values, but remember we are coming off a low base. I think it will continue, but we have some ways to go. There has been a turnaround in dairy with a lot more dairy properties coming this spring for a long time.’’
He said most dairy sales would have been for sub-$5million the past few years, whereas there was genuine interest in $5million to $10million properties, and less so for $10million-$15million farms.
This follows a dry spell in sales activity when buyers were put off by lower returns, pressure from banks as well as added environmental and regulation demands.
Low interest rates and high payouts have rekindled interest, as farmers looked to invest after reducing farm debt, with those close to retirement thinking of their succession plans.
Mr Newbold said neighbours were also back in the game, and corporates, large groups and investors were looking at dairying land as a ‘‘safe’’ return.
He said it was probably too early to say if this interest would translate into actual sales, but the signs were encouraging.
Sheep and beef properties for grazing and finishing were in steady demand, on the back of high lamb and beef returns.
This market’s also been stimulated by forestry investors snapping up land for carbon farming.
Mr Newbold said investors were prepared to pay a 10%-15% premium for this land, which was proving irresistible for owners.
Interest remains subdued for the large trophy stations since legislation on overseas investors was tightened.
However, PGGW does have a property about to go on its books soon which is just under this category.
- By Tim Cronshaw
