Property report: Rural market positive, despite sheep and beef woes
January 2024

Property report: Rural market positive, despite sheep and beef woes

Rural real estate momentum remains varies across the sectors, during the busy summer period on-farm.

General Manager of PGG Wrightson Real Estate, Peter Newbold, told The Country’s Jamie Mackay that interest in the dairy industry was now at higher levels than those seen in the past few years.

“We’re seeing a lot more interest, which is really positive,” he said.

“The feeling out there is that the trend is ongoing.”

Newbold said feedback from his agents in the field indicated buyers and investors were once again viewing dairy as having a good future moving forward, “which is really good because if you look back, a couple of years ago, [it] was all sort of doom and gloom”.

Sheep and beef properties, however, were not experiencing a similar level of interest, which Newbold put down to a need for values to be reset.

“When you look at the returns they’re getting, the cost to operate, the value of the capital stock, and you add all that up…it’s a tough space at the moment.”

Newbold also said the cost of entry into the sheep and beef sector remained challenging for newcomers.

“I understand some of the requirements around equity are really high, and then you add interest rates onto that - she’s a tough gig at the moment.”

Farmers were also currently facing challenges around capital stock values falling, which Newbold said had slowed the market.

“If you’re looking to expand an operation, no matter what livestock farming system you’re in, your capital stock, especially when it comes to sheep, are worth less… therefore you’ve got a bit less equity to go into it.”

Newbold believed horticulture was heading towards a positive space, with more properties poised to come on the market in autumn.

“I think we’ll see more activity [then], it’s in a much better space than it was 12 or 18 months ago.”

He said the promise of activity was good for regional New Zealand – particularly Northland and Bay of Plenty, which “rely on” horticulture.

Profitability aside for sheep and beef, Newbold said the upward change in sentiment was still palpable.

“It’s really apparent when you’re out in the field that people are feeling better.”

Newbold felt the big factors appeared to be a change in government, the summer break and reasonable weather conditions.

“If you think of towns like Timaru on Feilding or Cambridge, which are pretty much supported by that rural New Zealand, there’s a good feeling there.

“To me that indicates signs of better things to come.

“I think we’re in a good space at the moment.”

Peter Crean
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