Property report: Farm succession affecting the rural market
February 2024

Property report: Farm succession affecting the rural market

A positive breeze is sweeping through the rural property space, with a high volume of listings entering the market.

“Things are really changing,” general manager of PGG Wrightson Real Estate, Peter Newbold, told The Country’s Jamie Mackay.

A portion of those listings were down to natural movements within the industry.

“There’s a point in time people have to move on with things … people need to retire,” Newbold said.

However, when it came to on-farm succession, Newbold said a lot of families didn’t want to take over the family farm. 

“So they move on, and then there’s been a bit of economic pain, and so people are saying, look, it’s time to move.”

Newbold said the quality of listings he saw entering the market, along with the genuine reasons for selling, was “really positive”.

With significant changes in market values over recent years, Newbold said most vendors were successfully adjusting their expectations.

However, “if I’m honest” a few - mainly in the sheep and beef space - were not, Newbold said.

Newbold expected there would be a movement towards finding balance, as vendors would not purchase properties that didn’t “stack up” financially.

“I think there’s a little bit of toing and froing going on at the moment, but definitely, we’re starting to see that sort of meeting [between vendor and purchaser] and people are being realistic.

“I think over time that will just slowly improve.”

Recent positive Global Dairy Trade auctions and the subsequent lift in the forecast farmgate milk price have led to an uplift in momentum in the dairy sector.

“We’re seeing a lot more … people who are interested in buying dairy - when you look out over the next few years, it looks really positive,” Newbold said.

However, the higher end of the market remained slower.

“When you get over that $10-12 million, there’s probably less buyers - but they’re genuine.”

In terms of horticulture, a “wait and see” situation remained.

“We’re just coming into a period now where if you look at things like kiwifruit, where we’re just starting to list some properties, [it’s] probably a little bit too early to tell.

“But the feedback I’m getting is generally their interest and support.”

Newbold expected a rise in residential house prices this year will flow through into the lifestyle sector.

“That’s the trend.”

Improvement in markets such as Auckland, Christchurch or Wellington flowed through to the lifestyle market, and Newbold then expected to see lifts in rural places such as Cambridge.

“It’s very much linked to the city.”

But, Newbold warned, it would be a sedate process.

“It’s not going to boom, it’s just going to gradually move forward…but overall, it’s looking positive.”

Peter Crean
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