Lockdown takes a toll on farm sales

by Roxanne Libatique25 May 2020

New Zealand has started its gradual exit from the COVID-19 lockdown. However, it did not erase the impacts of the lockdown on many industries, including the rural sector.

The Real Estate Institute of New Zealand (REINZ)'s latest data confirmed that farm sales took a massive hit from the lockdown, with less than 30% farm sales for the three months ended April 2020 compared to the same period last year. Particularly, farm sales in New Zealand dropped from 362 for the three months ended April 2019 to 251 for the three months ended April 2020.

“Just as March 2020 will be remembered for the start of the COVID-19 constraints, April 2020 will be remembered as the month when, throughout most of New Zealand, sales volumes plunged, particularly when compared to the same period in 2018,” said Brian Peacocke, the rural spokesman for REINZ.

Read more: Property market continues to go downhill – report

Meanwhile, the median price per hectare for all farms sold increased from $22,624 recorded for the three months ended April 2019 to $22,660 for the same period this year.

Otago and West Coast also saw an increase in the number of farm sales for the three months ended April 2020 compared to the same period in 2019, with +3 and +2 respectively. In contrast, Bay of Plenty saw the most significant decline in sales (-23) followed by Taranaki (-16).

“The future well-being of the rural sector will now be even more influenced by climatic factors which have exposed the vulnerability of the sector, albeit the reduction in interest rates and the reduced exchange rate will be of benefit,” Peacocke said.

“One of the key determining factors for the future, however, will be the response from the trading banks regarding supplying sufficient capital for the requirements of the primary industries,” he concluded.

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