Interest rate relief sets the scene for rural expansion
Monday, 20 October 2025
The recent cut in the Official Cash Rate is great news for farmers and growers.
As most will already appreciate the NZ Official Cash Rate is a benchmark interest rate set by the Reserve Bank of New Zealand which this month was reduced to 2.5%, marking its lowest level since August 2022 and in a historical context represents a very favourable growth setting for primary sector exporters, particularly given this season’s very favourable exchange rate as the broader NZ economy battles on.
The difference in farmer interest rates today, compared to the same time last year, for those servicing a decent mortgage, represents a saving equivalent to the entire annual fertiliser bill! As we soon roll into the 2026 financial year, operational gains paired with the strong commodity cycle are expected to translate into a record tax take from our Primary sector.
What does all this mean for our rural property market?
Well, for those with a growth mindset, it’s not hard to envisage the motivation to take advantage of the current bank appetite for affordable rural credit and grow your business, rather than pay a record tax bills. Particularly when rural land values are starting to rise again, notably dairy, and buyers are showing up with bank support on favourable terms. The rural divisions of most banks are expected to be strong drivers of new business performance by financial year end 2026.
“Our True Team is proud to have achieved record rural sales through July, August and September - proof that confidence is returning to the land.”
Dairy farm sales this season are expected to match the 300+ sales achieved 10 years ago over the 2013/14 season. Hill Country valuations have now reset and expected to hold or improve post the downward correction in valuations following the forestry bubble and the impact of Cyclone Gabrielle in recent seasons.
Why go to market this season?
You might consider selling your farm this season due to strong buyer demand, solid farm values, and greater confidence in the outlook. Selling now affords the option to benefit from a very favourable market window ahead of the uncertainty of 2026/27 and all that goes with an election year.
The other important consideration is what do I do with my money when I sell?
Right now, the residential market has bottomed, making the option to sell on high and buy a property closer to town more affordable than ever. Don’t take our word for it, just look at our market results. We have had record rural sales results for July, August and September. October is shaping up to drive a similar outcome, with 44 pages of listings in this current edition, compared to 28 a fortnight ago.
I’d like to sincerely acknowledge our vendors for their continued support. Their confidence in us is a big responsibility and one we are very proud to own.
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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