Future optimistic for rural property buyers and sellers

As we move deeper into the fourth quarter of the calendar year, it’s a good time to review the evolving trends and influences impacting New Zealand’s rural real estate market.

The PGG Wrightson Real Estate team has been particularly active, with properties generating strong interest across the country.

“Our team has been busier than ever marketing quality rural properties, and we’re seeing a lot of enthusiasm from buyers eager to invest in New Zealand’s agricultural future,” says Peter Newbold, general manager of PGG Wrightson Real Estate.

With encouraging signals from the dairy and kiwifruit sectors and a close watch on international trade developments, there is a sense of optimism for rural property buyers and sellers.

Here’s a closer look at recent factors that could shape the landscape for rural real estate across New Zealand.

A dairy farm at Tilverstowe Road in Oamaru, is a 178-hectare environmental leading dairy and arable enterprise and is for sale by tender. Photo / Supplied

Dairy Sector: Rising Fonterra milk price and demand

There has been another increase in the Fonterra Farmgate Milk Price forecast, with the midpoint lifting from $9.50 per kgMS to $10.50 per kgMS.

For dairy farmers, this is a positive signal of strong market demand, primarily driven by increased interest in key export markets such as China, Southeast Asia, and parts of the Middle East and Africa.

The heightened demand in China is particularly notable, as it suggests that their domestic production may be under pressure. As such, New Zealand’s high-quality dairy exports are positioned well to fill this demand, which has contributed to recent rises in Global Dairy Trade prices.

With a strong outlook for dairy prices, this may drive renewed interest and confidence in dairy farm properties across New Zealand, as investors and operators look to capitalise on a favourable environment.

“The current payout forecast is excellent news for our dairy property clients,” says Trevor Kenny, PGG Wrightson Real Estate sales consultant in the Waikato and expert in dairy property.

“We’re seeing increased confidence and activity in the market, especially from those looking to secure properties that align with high production standards.”

The kiwifruit sector has had an impressive season. This G3 kiwifruit orchard at 1659 State Highway 10, in Kerikeri, is for sale by negotiation. Photo / Supplied

Kiwifruit industry: Record-breaking export season

The kiwifruit sector has delivered an impressive season, with exports reaching a record-breaking value of $3.1 billion as of August 2024, marking a 20% increase from the previous year.

This growth underscores the sustained strength of New Zealand’s horticultural exports, with gold kiwifruit proving particularly popular in markets like China.

For those interested in horticultural investments, these figures highlight the ongoing appeal of kiwifruit orchards. With stable and growing demand, the sector shows resilience and profitability, making kiwifruit properties attractive options for investors. As the season winds down, we anticipate that kiwifruit properties will remain highly sought-after in the coming months.

“With record-breaking export values this season, demand for kiwifruit orchards is strong,” says Andrew Fowler, PGG Wrightson Real Estate agent and kiwifruit farm specialist in Tauranga.

“Investors recognise the resilience and profitability of this sector, and we’re seeing significant interest in premium orchard properties.”

Twin Palms Orchard at 3 Trig Road in Waihi, is a horticultural farm producing G3 Gold and Ruby Red. Photo / Supplied

International trade: US election results and potential tariff impacts

International trade remains a critical factor for New Zealand’s agricultural sector, and recent developments in the US political landscape have drawn attention to the potential implications for exporters.

With Donald Trump’s recent election victory, the prospect of new tariffs has raised some concerns. During his campaign, Trump proposed tariffs of up to 60% on imports from China, with a 10-20% range on other international trade partners. While it’s uncertain whether these tariffs will materialise at those levels, even moderate increases could affect New Zealand’s competitive standing in the US market.

Fortunately, New Zealand’s diverse network of free trade agreements means that, while tariffs may pose a challenge, there are numerous alternative markets to absorb demand.

The US remains a key trading partner and is currently New Zealand’s second-largest export market, with strong demand for products like red meat, dairy, and wine. In the year to March 2024, meat exports to the US grew by 15%, showcasing an established market presence that may help weather potential tariff headwinds.

Should tariffs be implemented, rural real estate could see shifts in certain regions and sectors based on which products face increased costs and reduced US demand.

289/296 Tauranga Road, in Matamata, is a 97-hectare dairy farm with a 290-spring calving herd, three homes and infrastructure kept to a high standard. Photo / Supplied

However, New Zealand’s proactive trade strategy offers resilience, ensuring our rural economy has options should global trade conditions become more challenging.

Overall, the outlook for rural real estate remains largely positive as we head toward the end of 2024.

At PGG Wrightson Real Estate, our deep-rooted expertise in rural real estate and strong connections across the agricultural sector position us uniquely to support clients through these evolving market conditions.

For farmers and investors considering rural property transactions, staying informed of these trends is crucial.

At PGG Wrightson, we remain committed to leveraging our experience and insights to guide clients to achieve their property aspirations, backed by a robust understanding of New Zealand’s rural economy.

As we monitor these factors, we continue to see great potential for the growth and prosperity of rural real estate in New Zealand.

- View the listings for more information: 174 Hodges Road, Waimana; 289/296 Tauranga Road, Matamata; Tilverstowe Road, Oamaru; 13 Williams Drive, Te Puke; 3 Trig Road, Waihi; 1659 State Highway 10, Kerikeri.