After some tough years, several rural property market sectors are now responding well to the upswing in export demand for New Zealand primary production.
Dairy is leading the way, with the exceptional returns for red meat also starting to encourage more sheep and beef farmers to buy or sell land. Kiwifruit is on a similar trajectory. For some other sectors challenges still outweigh opportunity.
Click on the below links to jump straight to a specific sector report:
- North Island Sheep and Beef
- South Island Sheep and Beef
- North Island Dairy
- South Island Dairy
- Viticulture
- Kiwifruit
- Pipfruit and Stonefruit
- Cropping
- Forestry
With commodity prices higher than they have been for at least a generation, sheep and beef farmers have a positive mindset. Dropping interest rates and banks showing greater willingness to lend to the rural sector further underlines the buoyant mood. How strongly this feeds through into property transactions depends largely on the quantity of farms that come to the market over the next few months.
Succession is and always will be a prevailing reason to sell a farm. With returns at present so positive, the desire to exit may be on hold. At the same time, holding out risks not being able to find a buyer so easily.
Although now effectively on hold, the large scale of afforestation of North Island sheep and beef properties in recent years took farms out of the market. These farms would otherwise be coming through now to meet the demand that will persist in the current favourable conditions. Where farms were previously selling for conversion to trees at levels that sheep and beef farmers could not sustain, that option is now removed and values have dropped accordingly.
October and November are traditionally the main selling months for North Island sheep and beef properties, which looks likely to be the case this year.
SOUTH ISLAND SHEEP AND BEEF
Through the winter the South Island market for sheep and beef property has remained active. A number of farms listed for sale for some time finally transacted recently.
Three relatively large South Otago farms were sold to 11 different purchasers, typically with neighbours subdividing among themselves, a common trend of late. With improving confidence in red meat prospects, values have lifted moderately.
Mason Hills, 2500-hectares north east of Waiau, offering forestry and carbon credit income to augment the sheep and beef operation, settled in May.
As the spring and summer proceed, properties with scale should attract interest. Smaller properties are more likely to sell to neighbours.
High quality South Island sheep and beef properties listed for spring sale include Weka Pass and Gowan Hill, North Canterbury, comprising 770-hectares; and Glenside, a 752-hectare Waitahuna, South Otago farm in the same family since the 1870s and the location of a well-respected long established Simmental stud.
Rising commodity prices and falling interest rates should positively influence purchaser sentiment. Relaxed regulations around land not formerly grazed by dairy cows will extend that option and make some properties more desirable, particularly to the buoyant dairy sector, which should also lift the market through the spring and beyond.
NORTH ISLAND DAIRY
While North Island dairy farmers are enjoying the sector’s significant upswing in prospects, many are more intent on paying down debt than in transacting land.
Some however are ready to acquire property. These mainly comprise dairy families looking to grow their businesses, buying to provide a pathway in for other family members.
Notable winter sales include a 281-hectare Matamata property sold for $17.2 million, well above the district average value, and a 144-hectare Thornton property, recently redeveloped to the highest environmental standards, which sold for $60,000 per hectare.
Although quitting debt is a goal for many, bankers will be eager to put that money back to work, likely in the form of support for other farmers, particularly in dairy.
Some potential vendors have indicated they are motivated to sell, though are not yet fully convinced that the time is right. Others are firmly committing to a sales process this season. With the abundance of buyers in the market and values on an upward trajectory, anyone who does opt to sell can legitimately expect to be well rewarded for their decision.
One spring listing that should attract steady interest is a 360-hectare Galatea property with centre pivot irrigation, carrying 1200 cows.
SOUTH ISLAND DAIRY
After several autumn transactions, which incorporated a lift in values, of the few South Island dairy properties that remained available for winter sale, most are now under contract.
Although the number of investors with an appetite for dairy is growing, including retail investors for the first time since 2013, farmers are holding off selling property, opting to capitalise on promising forecasts. Intense buyer competition is likely to characterise the spring and summer.
Farm gate milk prices, longer term projections and lower interest rates are encouraging a positive mindset, further supported by the probable sale of Fonterra’s consumer brands. Smart investors may be willing to exceed current property values. Banks have a renewed appetite for agriculture.
Any quality dairy farm should sell well this spring. Notable listings include 440-hectare Golden Bay farm Bonnyfield; a 223-hectare Dorie, Mid Canterbury dairy property for sale by auction on 15 October; and four separate Rimu and Wyndham, Southland dairy farms from the same vendor, totalling 650 hectares.
Demand is likely to exceed the available supply of South Island dairy farms this spring and summer. Anyone thinking of exiting the sector will be well-placed to take advantage, particularly considering the additional equity held in their dairy cows, which has never been higher.
VITICULTURE
An oversupply of grapes in recent seasons, including a bumper 2025 crop, has created an excess of unsold wine. Reduced demand for New Zealand exports is not helping.
Strict yield caps are set to be enforced on the 2026 harvest, average per tonne prices paid on supply contracts for the flagship Sauvignon Blanc variety will be down, and some growers are still awaiting confirmation that their grapes will be contracted.
Growers are using pruning and other vineyard management techniques to manage yields down, treating some older vineyards as dormant this year, rather than cropping them, while delaying re-planting other older vines.
Uncertainty therefore prevails in the viticulture property market. Plans to buy or sell land are on hold, while development of new vineyards and redevelopment of existing properties are being rescoped: sales are scarce and land values have not been tested for some time.
All other factors aside, at present overseas based entities own around one-third of Marlborough vineyards. In the past overseas owners have provided investment, knowledge, and international recognition to inspire development and innovation. Investment from overseas could again be the stimulus to re-energise the sector. In the meantime, viticulture property transactions will likely be treated with caution and subject to strict due diligence.
On the rebound after a couple of difficult seasons, the strength of global markets has lifted prospects for horticulture, resulting in the sector showing its greatest momentum in years. Even at higher values, some quality kiwifruit orchards are achieving sustained double-digit returns.
Development of new orchards has once again picked up. Concentrated east of Te Puke and mostly former dairy farms, development blocks total over 130 hectares. These blocks take between two and four years to come into full production.
Held in May, Zespri’s licence auction offered two different types of licence: to plant 250 hectares of undeveloped land in the G3 gold variety, and to cut-over 150 hectares of green kiwifruit for conversion of the rootstock to gold. These sold for $561,000 per hectare and $454,000 per hectare respectively.
A-grade production blocks growing green kiwifruit are changing hands at and above $500,000 per canopy hectare. Gold orchards meanwhile are selling between $1.4 and $1.6 million per canopy hectare, exclusive of fruit.
Notable spring listings include a 4.8 canopy hectare mature gold Maketu orchard; a 9-hectare Te Puke highway orchard, 10-canopy hectare Edgecumbe orchard, also gold; and a total of over 70 hectares of land with the location, altitude, scale and abundant water required for development into first-class orchards.
PIPFRUIT AND STONEFRUIT
Pipfruit and stonefruit growers face some challenges. One relatively new industry player, a high-profile licensed variety previously delivering excellent returns, looks to have overreached. By overestimating supply over the next two to three years it has significantly outrun projected export demand. This puts the variety’s viability at risk, leaving associated growers under stress.
Growers with licenses for the star export varieties can look forward with confidence. Those who elected otherwise face uncertainty. As the market is now structured, to keep up with demand for new varieties growers need to factor in renewing ten to 15 per cent of their trees each year. Unless they have an orchard of sufficient scale to attract a larger corporate purchaser, or the financial resources to switch varieties, they are likely to struggle.
On a more positive note, two of the sector’s largest trading entities recently returned to profit.
Recent sales activity is focused on four Hawke’s Bay orchard blocks, totalling approximately 100 hectares, which sold under Overseas Investment Office approval. All outside the Cyclone Gabriel floodzone, an important consideration, their new owner has tagged a big percentage of these properties for total redevelopment. Most existing trees will be pulled out and new varieties planted.
Typically, cropping farms tend to be tightly held within a limited number of farming entities. Enduring a period of price pressure and diminished returns, arable farmers have not been inclined to participate in the property market over the past few months.
Those notable cropping properties that have sold recently have generally been supported by dairy farm owners looking to consolidate their businesses by securing opportunities for grazing and supplemental feed.
As the upswing in the dairy sector gains momentum, likely associated with increased demand for grain, additional revenue and levels of optimism among arable farmers should grow, though this could take a few months.
Among cropping farms, a top-quality spray irrigated unit near Greendale; a dryland property with good infrastructure and soils near Rakaia; and a 168 hectare property on the outskirts of Timaru have all sold well in recent months.
Some smaller South Canterbury bareland blocks, between 100 and 200 hectares, will be offered for sale in the spring market.
In the present conditions genuine arable only properties carry less appeal, while those with scale, plus flexible and versatile land use potential, will attract a growing list of motivated buyers, including those looking for dairy support or possibly conversion to a milking platform.
FORESTRY
Regulatory changes since the 2023 election have altered the forestry property market. Although for those with forest plans and trees ordered some activity is still occurring, the rest of the market is largely in hiatus.
Changes to the Emissions Trading Scheme (ETS) have restricted the quantity of forest that can be registered. For actively farmed land capable of supporting other productive use, no more than 25 per cent can now enter the ETS, largely eliminating such land as an option for carbon forestry, and therefore reducing the potential sale of such land for conversion from pasture to trees.
Some private sales have proceeded, mainly to New Zealand nationals and private buyers.
For overseas investors focused on scale, opportunities remain. Some Southland sales in this category are in process, pending meeting the Overseas Investment Office’s special forestry test.
Also subduing interest in forestry property, both the export and local timber markets are at a low ebb. Some farm woodlots are selling, though with returns at the lower end of the cycle, most will be content to hold them until the market improves. Sawmills tend to be only cutting to meet specific orders at present.
