Despite a GDP drop for New Zealand this week, news of the US Federal Reserve’s first cut in interest rates in four years has led to positivity in the New Zealand rural real estate sector.
Speaking to The Country’s Jamie Mackay, PGG Wrightson’s General Manager for Real Estate, Peter Newbold welcomed the US move.
“If you look at what happened with the Fed overnight – that stimulates, and helps and changes sentiment,” Newbold said.
“You’d like to think we’ll see some more interest rates here in New Zealand – that will only help [the sector].”
With daylight saving approaching in a fortnight, Newbold said late spring listings were still coming to the market.
However, as has been the common refrain this year, Newbold reinforced the need for vendors to be realistic about pricing sheep and beef properties, given the buyer pool has reduced in recent years.
“If you look at a sheep and beef property in a good location [with] good infrastructure, that is priced correctly, there are still buyers out there,” he said.
“But if you don’t price your farm where the next person can get a return on it, then [that sale] is not going to happen.”
With dairy industry forecasts looking positive, Newbold said he was surprised by the low number of dairy properties on the market.
He acknowledged corporate buyers were, once again, looking at investing in the sector, saying the move was “a good thing”.
Similarly, volumes in the horticulture space also remained low and Newbold said it was hard to get a take on where the sector was headed.
“It’s probably the quietest it’s been in several years.”
Despite this, he remained positive and expected to see more movement over the spring months.
“We’ve seen some larger properties transact in recent times, but we haven’t seen the volumes of 18-24 months ago – but that’ll change.
“I think the market’s settled and the values are where they should be.”
Newbold singled out the arable sector as “probably the highlight” at present.
While not a lot of arable farms come to the market here in New Zealand, there was demand for them, Newbold said.
“If you look at what’s taken place over the last 12 months, and what’s coming up – I think we’re going to see good activity there.”
He predicted that due to succession, or retirement – a few arable properties will hit the market in the near future, with good value being returned to the vendors.
Also in today’s interview: Mackay and Newbold discussed the IHC Calf & Rural Scheme and IHC Ngāi Tahu farm visit.
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