Waikato rural property market picking up.
Waikato farm prices are expected to lift this season on the back of a brighter outlook for dairying, continued strength in returns on beef and heightened interest from urban investors, according to Greg Kellick, Regional Manager for Property Brokers.
“The spring has seen a slower start to new listings and sales than usual, but activity is certainly starting to pick up. All eyes are on several large dairy properties that are now on the market,” Greg says.
These properties include one of New Zealand’s most high-tech farms – a 72.7ha dairy farm with robotic milking plants and an extensive self-feeding barn at Puketaha, on the east side of Hamilton. The operation has automatic drafting gates that allow unimpeded cow movement to and from the shed 24 hours a day. The farm has a state-of-the-art effluent separator, numerous other supporting buildings and a large house.
The property, on Holland Road, was developed three years ago as one of around 10 robotic milking operations in the country. It has 16 separate titles, making it even more attractive to investors. This farm will be sold through auction on 8 December
Greg foresees improvement in dairy farm prices region-wide as the sector pulls out of two years’ depressed milksolids payout. “There has not been a deluge of property sales as earlier feared but values have been depressed since 2013. Several smaller units have sold recently at prices down around 30% compared with just last autumn. Nonetheless, confidence is now returning on the back of spring grass growth and the forecast upturn in the payout for 2016-17.
“Recovery in dairying will flow onto drystock land values due to the traditional mixed use of much of the Waikato’s good grazing land. Current beef prices make cattle finishing an attractive option alongside dairy support,” Greg says.
The pace of the recovery will, nonetheless, hinge on the price expectations of buyers and sellers, he adds. Many of the former are still looking to buy at last year’s levels or lower, and some vendors may have to moderate their optimism for a while yet.
Greg says the market is also aware that the Waikato is seeing some structural shift away from dairying, driven by moderating expectations of return on investment over the longer term, new Environment Waikato proposals for on-farm management of nutrients and pressure on water supply for new irrigation.
“Conversions from forestry to pasture have slowed in the South Waikato, including the cancellation of one large project this spring. There is also a general move to reduced herd sizes as farmers increase their focus on cost control,” he says.
“Dairying does, of course, remain a very attractive industry to many investors. The Waikato – northern and central in particular – has an increasing pull on capital from Auckland and further afield.
“Investors are looking for better returns than now available in local and global debt markets, and other property sectors, especially if dairy farms can be secured at or near the cyclical low point. Lifestyle is also a strong attraction for buyers who have cashed-up in the Auckland market.”
For more information, contact Greg Kellick 027 619 3051
Manawatu dairying favoured as milk prices recover.
Manawatu is gaining further recognition as a prime dairying region in context of the 2016/17 recovery in milk prices, according to Blair Cottrill of Property Brokers.
“Further pickup in the forecast milksolids payout is expected to invigorate the market for dairy properties in the Manawatu, where prices per hectare have traditionally been well down from Waikato, Taranaki or Canterbury,” Blair says. “Two years of depressed payout have injected new caution into dairy farming across all regions – and at the same time, spurred the search for value by people looking to invest in the sector.”
The market has seen a quiet start to spring but listing activity picked up during October. In one indicator of emerging new demand for Manawatu dairy country, Property Brokers sold a prime block of dairy or bull beef grazing land near Palmerston North this winter for $49,000 per hectare, significantly above the prevailing level of recent seasons.
“There is a broad expectation that more buyers and sellers will come off the sidelines at the next lift in farmgate milk prices,” Blair says.
The market for livestock farms is steady with 21 grazing or finishing properties sold during the September quarter. This is consistent with the corresponding months of 2015, and prices are also little changed.
“Generally the Manawatu offers buyers a good range of flat and hill country properties, although without farms generally acknowledged as spectacular in size and/or location (of the kind found in various other regions),” Blair says. “The Manawatu is advantaged by its typically high rainfall and central location in the lower North Island.”
Among properties now on the market, Avington Dairy Farm is an excellent example of Manawatu dairying to a very high standard. The 71.5ha property near Feilding is fully irrigated from its own deep bore, has a large feed pad to mitigate pasture damage during the wettest winters, and includes a modern 28-bale rotary milking shed with automated cup removers. Avington Dairy is for sale by tender.
For more information, contact Blair Cottrill 027 354 5419
Rural property market stirs on renewed farming confidence.
The rural property market in Wanganui and Rangitikei is picking up slowly as confidence returns to New Zealand farming, according to Richard White of Property Brokers.
In the Wanganui district, there were nine farm sales during the past winter which was double the level of 2015, and Richard expects an increase in listings over the months ahead. “Beef prices are holding up and, although returns on sheep meat continue to disappoint, there is a general lift in confidence for all pastoral farming from ongoing improvement in milk prices,” Richard says.
Wanganui is recognised for its excellent sheep and beef country, and Richard says there is growing awareness of the potential also for increased dairying in areas with gentle contour and good rainfall. “That potential is enhanced by our proximity to Fonterra’s Hawera site and the recent expansion of Open Country’s plant at Wanganui.”
Richard says, traditionally, Wanganui properties coming on the market attract keen interest from farmers within the region and that continues to be so in 2016. This was apparent from the sale of Tirimoana Farm, a high quality finishing property of 172 hectares near Fordell, which sold well to local interests in the autumn.
He says the Rangitikei district is also acknowledged as having further potential for dairying, in addition to its significant number of established operations. One of those is now on the market, attracting significant interest for the quality of its facilities and pasture. The 121ha farm near Marton has a very favourable production record (1422 kg of milksolids per hectare in one recent year).
There have been a handful only of livestock farms listed in the Wanganui/Rangitikei region so far this season. Honey production is increasingly important to the Rangitikei in particular, with buyers signalling a new demand for access to manuka stands.
For further information, contact Richard White 027 442 6171
Hawke’s Bay market stirs on return of farming confidence.
The Hawke’s Bay rural property market is stirring after a particularly quiet winter and early spring, with confidence now returning to much of the region’s farming community, according to Pat Portas of Property Brokers.
Recovery in returns to dairying, an upturn in venison prices and continued strength in beef are all positive for the farm market, along with the excellent spring conditions now being experienced across most of Hawke’s Bay, Pat says.
He expects listings and sales activity to increase from now on, with several notable properties coming onto the market. These include The Steyning, an award-winning 317ha farm in the summer-moist rolling hills of the Tikokino district, in the central Hawkes Bay. The Steyning – noted for its large deer breeding and finishing operations, and conservation features –will be auctioned in Waipukurau of 13 December.
Pat says the region’s property market was relatively subdued during the September quarter with only 12 livestock grazing or finishing properties changing hands, and no dairy farms.
“The dominant theme is strategic buying by farmers who seek to expand or reconfigure production within their own region,” Pat says. “The Hawke’s Bay has yet to see the return of many buyers wanting to relocate there after selling bigger properties in other parts of New Zealand, notably Canterbury. This was certainly a factor before 2015.”
He expects more such strategic buying and the return of out-of-region interest at some point, as the fortunes of pastoral farming continue to improve New Zealand-wide and greater certainty emerges around the region’s proposed Ruataniwha Water Storage Scheme.
The latter now awaits decisions within the newly-elected Hawke’s Bay Regional Council and also next steps over a legal challenge from conservationists. The scheme includes a dam on the upper Makaroro River to control water flows and to enable irrigation on up to 30,000 hectares of productive land.
“If it proceeds, the Ruataniwha scheme is not expected to bring any substantial shift to dairy conversions but, instead, to support a range of land uses,” Pat says. “This will definitely have an impact on values in the Central Hawkes Bay, with market activity likely to pick up once the future of the scheme’s future is confirmed under any scenario.”
For more information, contact Pat Portas on mobile 027 447 061
Tararua earns greater recognition in the rural property market
Farm sales are up in Tararua this spring as more people recognise the district’s potential for both dairying, and sheep and beef, according to John Arends of Property Brokers.
Market activity is currently at its highest level for some years, as several farmers in Tararua look to upscale and as new interest arrives from outside, John says.
“There’s growing recognition that Tararua is very well located, that it has rainfall higher than regions to its north and south, and that land values have traditionally been lower than elsewhere for little reason.”
Interest in dairy properties is being stimulated by improving dairy prices with the prospect of substantial recovery in the milksolids payout to producers. The plains between Eketahuna and Norsewood have long been favourable dairy country with a wide diversity of farm sizes. Fonterra gave the district a boost in 2015 when it invested $235 million in a third milk drying plant at its Pahiatua site.
John says buying interest is generally from people who are clearly knowledgeable on farming in the lower North Island and aware of new nutrient management requirements under Horizons Regional Council’s One Plan. “Potential purchasers appear to be taking account of the prospect that stocking rates on some country will be restricted and additional costs could arise for effluent disposal and fencing.”
Tararua also offers substantial areas of high-quality country for sheep, beef cattle and deer. Among farms brought to the market so far this season is Waiwera Station, a 674ha sheep and beef operation recognised for its excellent finishing capabilities. Waiwera is located against the Tararua ranges, south west of Pahiatua.
For more information, contact John Arends 027 444 7380
Wairarapa rural property market picks up The Wairarapa rural property market is increasingly active as confidence returns to farming here and nationwide, according to Paul Joblin of Property Brokers in Masterton.
He says all indications are for listings to rise as more buyers and sellers come off the sidelines in response to higher returns to New Zealand dairying in 2016/17, and the relative strength continuing in beef and venison pricing.
“Farmers’ succession planning is also a key theme in the region and excellent spring conditions make this the time to act,” Paul says.
Farm sales in the Wairarapa were slow through the winter although several properties listed since late 2015 did eventually sell after modest adjustments to vendors’ price expectations. In contrast, the region has continued to see active trading in lifestyle blocks with a substantial increase to 288 in the number of such sales completed in the first nine months of 2016. This partly reflects new rural subdivision activity.
The nine-month period saw only two dairy farm sales with this category of property remaining tightly with little debt in the Wairarapa. There have been no sizeable new conversions for some years. Proposals for a substantial water management project in the region are at an early stage and Paul says they have yet to influence the property market.
“Manuka honey production is, however, an active driver of interest in rural blocks Wairarapa-wide, especially where the land has remnant or new manuka stands,” he says. “Drystock farmers are seeing bees as another source of income and the region also has newcomers looking to buy land primarily for honey production.”
For further information, contact Paul Joblin on mobile 027 443 3756
Canterbury farms with irrigation back in demand.
Canterbury farms with good location and secure irrigation are back in demand as rural investors anticipate further recovery in dairying, and favourable returns on beef and venison, according to Mark Lemon, Rural Business Development Manager for Property Brokers. “Strategic buyers are being quick to move on the best properties, dairy and drystock, and sale values for these are back to their level of two years ago,” Mark says. “However demand is very selective and some properties have yet to attract the interest they did previously.”
“The most active buyers tend to be other Canterbury farmers with a solid understanding of farming fundamentals in the region, and a keen eye for expansion while interest rates remain low and other types of investor are still largely absent from the market,” Mark says.
“Like other regions, Canterbury has seen relatively few forced sales of highly-indebted dairy farms during the past two years of depressed milk solids payout. Bank support for individual farmers appears to be a significant feature as everyone awaits further recovery in the payout.”
Listings have increased as the 2016-17 season gets into full swing. The September quarter saw 27 grazing or finishing properties sold – slightly up on the corresponding 2015 period– but no dairy farm sales.
That is expected to change rapidly with several high-quality dairy units now on the market. These include a show piece farm of 159ha with good soils, efficient spray irrigation and excellent plant, on Fords Rd near Ashburton. This highly productive operation (1646 kg of MS per hectare last season) is on the market for $8.6 million (plus GST if any). Other listings include a range of mid-sized and bigger dairy and grazing properties in central and south Canterbury.
Mark says the market is very aware of water issues in the region, with buyers putting higher value on land that has reliable supply and linkage to a pressurised irrigation scheme. In central and south Canterbury, there is particular interest in a large water storage plan for augmenting the Rangitata Diversion Race scheme for further drought-proofing the region.
For further comment, contact Mark Lemon 027 339 6665
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