A strong opening act for rural property in 2026
Monday, 9 February 2026
New Zealand's rural property market shows strength early in 2026, with eyes on what comes next
The rural property market in the run-up to Christmas was by far the strongest result in the last five years, with $1.7b of farm real estate sold over the quarter ending 31st December 2025.
Consistent gains in the commodity cycle, lower interest rates, and a much-improved regulatory approach have continued to fuel farmer confidence this season. The big question for 2026 is whether the rural property market will keep going on its current path. In the short term (late summer/autumn), our view is a firm yes; however, the second half of this calendar year could be another story.
The primary sector recovery last year was underpinned by record export receipts of $60.4b, equal to 83% of all NZ exports. Further gains are forecast for this season, but not at the double-digit gains of last year. The softening payout ($9/kgMS mid-point) has definitely taken some of the hype out of the dairy market, but nobody was doing status quo budgets at $10+ levels.
In addition, there have been significant regulatory gains through land-use flexibility that support existing property rights. However, it’s going to take time for the market to gain confidence in this change of regulatory approach. This year will see a complete overhaul of all existing land use management processes, the biggest change since the RMA Act came into force in 1991.
In the meantime, the recently passed Resource Management (Duration of Consents) Amendment Bill will allow expiring consents to be extended by two years to 31 December 2027; those consents are proposed to be extended again to mid-2031, once the Natural Environment and Planning Bills are passed. The new planning system is intended to be fully operational by 2029. Compliance costs and uncertainty with existing resource consents have been a serious market impediment. It will be good to see our sector’s commitment to sustainable land use and environmental farm plans supported through a dramatically improved regulatory framework.
Buyers are far less capital-constrained in this market, but they will be paying close attention to a firming dollar and its impact on farmgate returns, as well as forecast increases in the Official Cash Rate (OCR). It’s worth remembering that the Kiwi/US dollar was at its most favourable in 16 years last year, and that the 2.25% OCR announcement late November 2025 was the lowest since May 2022 and half the rate of the previous spring. We need to go back to the Spring of 2021 to find similar market conditions. This spring achieved $1.7b in sales from 446 farm sales over the 90 days from 1 Oct 2025 to 31st Dec 2025. Refer to the graph below.
Government forestry settings have dramatically impacted the rural property market. The billion-tree initiative was the golden ticket for Hill Country sales from its announcement in late 2018 through last year. Now is a very different story under tightened regulation. If we go back to the spring of 2021, there were $821m of sheep and cattle farms sold, equal to half the value of the rural property market. Dial-up spring 2025 sales reached only $500m, representing 29% of the market value for the same 90-day reporting period, even with much-improved farm gate returns. Alternative land use is having significantly less influence on the market now.
Dairy farm sales equalled $880m for the three months to 31st December 2025 with a much stronger clearance of larger dairy farms compared to previous seasons, notably in the South Island. We still view NZ dairy farms as a strong buy however outside of the blue-chip dairy locations, purchaser expectations continue to mirror farm-gate returns and what the property can return with very little reliance on forward revaluations.
Our view is that all buying interest should be given serious consideration as current settings are likely to come under continued pressure from strong international milk supply, an appreciating NZ dollar, and signalled rises in longer-term fixed rates. We could throw in an election year for good measure, too.
We continue to close out listings on behalf of our vendors. This is the best season in a long time to match a willing buyer with a willing seller. Nothing about the outlook for 2026 is a given, and a bird in the hand is better than guessing!
Whether you’re looking to buy or sell your farm or lifestyle property, our True Team is here to exceed your expectations. With a perfect blend of energy and experience on your side, you can’t go wrong with Property Brokers.
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