The latest data on farm sales has shown a further slump in volumes and a drop in prices, according to the Real Estate Institute of New Zealand’s Rural Market Statistics.
There were only 171 farm sales in the three months ended September 2022, down 17.8% on the three months ended August 2022 and down 38.9% on the three months ended September 2021.
Overall, 1,525 farms were sold in the year to September 2022, down 15.3% compared to the year to September 2021. Dairy farms were down 3.2%, dairy support down 19.3%, grazing farms down 19.4%, finishing farms down 13.7%, and arable farms down 7.8%.
The median price per hectare for all farms sold in the three months to September 2022 was $23,080, down 10.2% on the three months ended August 2022 and down 25.3% on the three months ended September 2021.
The REINZ All Farm Price Index, which adjusts for differences in farm size, location, and type, decreased by 3.2% in the three months to September 2022 compared to the three months to August 2022 but was up 0.2% compared to the three months to September 2021.
Increasing inflation and increasing interest rates are causing concern but REINZ also pointed to ‘simmering resentment’ in rural New Zealand about environmental policies and rules, especially around climate change and water, impacting on investment decision-making. Meanwhile, although current returns for farm production have been good, they have been increasingly volatile with increasing farm input costs eroding profitability. This is adding to a sense of caution.
Wai for next year. Interest rates cannot be kept low. Outside pressures and inflation will see borrowing is made expensive. Deep state creates boom and bust and the boom days are over.
Yeah, the old pump and dump. Only this time it’s with peoples houses and livelihoods. Disgusting.
This world needs a clear out of these corrupt greedy globalists. Exactly the same players as in World war 2.
If farm prices drop like a stone would that mean Bill Gates and friends could buy at pennies on the pound and create food supply monopolies?
Successive governments were creating excessive inflatioin in NZ. 60 billion dollars quantitative easing is the Poisson which will take over a decade to remove from the economic system.
Many farmers are farming for “capital gains”. They all have excessive debt. The return on capital is less than 1% in many cases, and most of the gfross profit goes towards servicing debts. This unrealistic gamble works because inflation is created by the government, with no per capita GDP increase.
Jacinda Arden was splashing dollars not based on taxes but based on the quantitative easing. This is morally wrong and actually theiving savers. Speculation in housing was encouraged and the bubble is made bigger and bigger. Waiting for USD collapse or greater fall in its value which will bring down all the currencies such NZD closely tied to it. Fed interest rate hike is keeping USD valued artificially high and this gamble will eventually fail too. Fiat currencies, not backed up by assets and manufacturing strength, are destined to fall.