New figures have shown that the
prices of farm property in New Zealand have fallen to their lowest level in
eight years. The Real Estate
Institute of New Zealand reports that the median price per hectare of farmland
in the second quarter of 2011 was as low as it has been since September 2003,
although farming experts argue that the value of farmland should not be a major
consideration.
Farm property in New Zealand sees values fall to 8 year low
The New Zealand Herald reports that the median price per hectare for
all farms for the three months ended July was $14,649 (ã7,480) compared to
$17,901 (ã9,140) in the same period in 2010.
301 farms were sold in the
quarter ending July 2011, down from 393 in the previous three months. The drop in sales was attributed to
seasonal issues, with the Instituteââ¬â¢s rural market spokesman Brian Peacocke
saying: ââ¬ÅFarmers are keenly watching events in financial markets and the trend
in the New Zealand dollar.
“The high dollar over the
past few weeks is causing some concern, however, the outlook for the currency
is difficult to predict and the situation, particularly in respect of the
United States, remains volatile.
Nevertheless, forward inquiry for quality properties remains
positive.”
Cash flow more important than land value says expert
While prices may have fallen to
an eight year low, farming experts are urging farmers not to be worried by
these new figures.
Federated Farmers president Bruce
Wills said: “The important focus is on cash flow. What exploded those land values in the
mid to late 2000s was very free and easy credit from the banks.
“So we’re now in a situation
where that excessive debt is being managed out of the system so we’re seeing
prices come back as a consequence … they’d certainly got out of kilter.”
