The new stats echo the slump seen in the residential sector
Rural and lifestyle sales took a dip in the three months ended June 2019, with REINZ stats showing a year-on-year decline compared with the same period of the previous year.
This follows REINZ’s recent release of its June data, which recorded the lowest number of properties sold for that month in the last five years.
Lifestyle property sales were down by -3.0% compared to the three months ended May 2019, and down by -6.0% compared to the three months ended June 2018. Meanwhile, farm sales declined by -24.6% year-on-year for the three months ended June 2019, with dairy, finishing and arable farms all seeing a decline.
The median price for lifestyle properties lifted slightly – up by +4.9% compared to the three months ended June 2018, and the median price per hectare for farms sold lifted by +1.4% for the same time period. REINZ rural spokesman Brian Peacocke said the statistics paralleled the overall dip in sales felt by the residential sector, and were partly down to a much more rigid lending position adopted by the country’s main banks.
“Sales volumes for the 3 month period ending June 2019 are at their lowest level for several years, and to some extent, reflect the easing of sales volumes experienced in the residential sector,” Peacocke said.
“Consistent also are the reports from around the country indicating a much harder stance being adopted by the trading banks, where strong equity levels and good healthy cash flow are not necessarily a guarantee of success in applications for funds.”
Peacocke says the 2.4% rise in the All Farm Price Index indicates that the non-dairy sector is in better shape than the dairy sector, while warmer temperatures and rain showers have meant reasonable pasture growth.
“Product prices for beef, lamb and horticultural products remain strong and are improving, and while indications for dairy seem reasonable, volatility in that sector remains a constant,” Peacocke noted.
“The current level of interest rates continues to be an attraction for borrowers but reports from around the country confirm a tightening of lending criteria from banks across the board, irrespective of due diligence and equity criteria being fulfilled, to the extent that a strong degree of caution continues to prevail within the farming sector.”
