Record prices continue for large scale hill country – 30% up year-on-year

Wednesday, 23 February 2022


2021 was a record year for large sheep and beef sales, with the highest median price per hectare equalling $10,300/ha for properties 200 hectares or more in size on a rolling 12-month average to 31 December 2021. This is up by 30% on 2020, representing the most significant year-on-year increase in 20 years.

2008 remains the peak year for large sheep and beef farm sales, totalling $1.6 billion. This was pre-GFC and driven off the dairy conversion boom that converted a million hectares of predominantly finishing country.

However, NZ’s pastoral sector is on a steady climb back to pre-GFC highs, with total sales value equalling $959 million for 2021, again driven off land-use change, but this time it’s carbon and permanent forest driving the change. This trend continues to accelerate into 2022 as the carbon price marches on. Our view is that we will see more land sold to carbon interests this year than any prior period, but more onerous regulatory hurdles are anticipated by 2023.


Keith Woodfords recent Farmers Weekly observations indicate that carbon units in private hands are worth a staggering 11 billion dollars.


Forward carbon demand is predicted to exceed supply for some time yet, putting further pressure on the auction. However, what is often left unsaid is that the great majority of hill country properties are not for sale and the balance sheets of these businesses continue to improve with or without a carbon market.

The current year-on-year revaluations only serve to further support hill country, business models. Consequently, we expect to see demand for quality beef and lamb finishing ground accelerate; on a comparative basis, this ground looks cheap, particularly given the windfall with hill country revaluation gains.

For those of us who have worked with the pastoral sector for a time and reflect on the last 30 years, we can say for certain that those farmers who took the long-term view and stayed with their assets have definitely been rewarded. It has not been easy; the current carbon influence is simply a point in time, no different to navigating competition from forestry in the 1990s, the dairy boom of the 2000s, and the post-GFC and environmental regulation that followed this last decade. However, whenever the music stops, it can take a long time to recapture the premiums attributed to significant land-use changes. Historically, the market typically reverts to the long-run return, and those keenly sought “land-use change” premiums evaporate.

Our commitment to the rural sector is long-term. For those considering an exit, make no mistake, we continue to see farmers wanting to buy pastoral hill country farms, particularly if it has a strong production history and the ability to finish stock. However, if you have an extensive hill country farm and no obvious farm succession plan in place, it might pay to review the chart below because when you look back over the last 20 + years, it would appear there is no better time than the present to look at your options.

  We go to market with our Autumn Rural Outlook in the last week of March. We are accepting expressions of interest now for anybody wanting their property showcased across 75,000 rural letterboxes nationwide this autumn.

For rural and lifestyle property advice from a national team of committed salespeople, supported by our expert marketing team, right across New Zealand, call 0800 367 5263 or visit pb.co.nz.  

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