Farmland near Wharepapa South
After a tough time, farmers appear to be on solid ground, but that doesn’t necessarily mean the rural real estate market is due to boom… or bust, as Jon Rawlinson discovered.
Farmland near Piopio. Photo PGG Wrightson
Improved profitability, strong meat and dairy prices, a bumper Fonterra payout and recent tweaks to KiwiSaver rules are all positive signals for the sector. At the same time, global uncertainty, including conflict in the Middle East, along with rising input costs, is keeping confidence in check.
Demand for farms has been increasing, including in the Waikato and King Country, but that is only one part of the picture when it comes to rural property, PGG Wrightson sales manager Camron Meade says.
Camron Meade of PGG Wrightson.
“The rural property market has been positive for the past 18 months or so, particularly in the dairy sector,” he says.
“In spring, there was a build‑up in demand, which created good competition for well‑presented farms.”
Meade oversees the Waikato, King Country and Bay of Plenty markets and says while buyer interest has strengthened, that has not necessarily been matched by an increase in supply.
“Heading into autumn, we’re noticing a reluctance to bring properties to the market,” he says.
“A lot of farmers are holding on because they’re making good money, so that pent‑up demand is building.”
For some farmers, however, current conditions may present an opportunity to sell.
“For the right property, particularly in the dairy sector, there is a pool of buyers, which creates more of an exit opportunity for people holding that type of land,” Meade says.
Dairy continues to lead the way, supported by a strong farmgate milk price. Fonterra’s sale of its consumer division has also contributed to improved returns, adding further confidence for dairy farmers considering their options.
The sheep and beef sector has faced a different set of pressures, particularly in areas such as the King Country, where forestry has played a significant role in recent years.
“The region was heavily exposed to forestry, and sheep and beef land was closely linked to that,” Meade says.
“There were some very strong hectare rates as a result, but that chequebook has largely been put away now.”
Changes to KiwiSaver rules have been welcomed by Federated Farmers as a step forward for younger farmers looking to enter the market, but Meade does not expect the reforms to have a major influence on rural property values overall.
“It will make things a bit easier for some young farmers, which is positive, but I don’t see it shifting farm values or overall market activity in any significant way,” he says.
Looking ahead, the general election is expected to be a key factor, with some potential buyers and sellers taking a wait‑and‑see approach.
“The election will have a major impact,” Meade says. “People tend to hold off until they have certainty. From a farming perspective, the outcome will be critical.”
He says recent efforts by the current government to reduce regulation have reassured farmers and supported confidence.
“Any change to that direction would influence attitudes towards buying or selling farmland,” he says.
Another increase in the Official Cash Rate could also have an impact, but Meade says lending conditions remain an important driver.
“With rural property sales, the biggest influence is the banks’ attitude to lending,” he says.
“With debt levels reducing, banks are more willing to lend to farming businesses that are well run, compliant with regulations and investing in modern systems. They are keen to support those types of operations.”
Farmland near Wharepapa South. Photo PGG Wrightson
