When is the right time to sell?
In years gone by, we have seen the numbers of buyers diminish for dairy and drystock farms in response to poor commodity prices. As the returns declined, so did the land values and eventual purchase price. Currently, commodity prices are strong, and farmers are making a good return on investment. As a result, buyers are motivated. When the commodity market weakens, so too will the buyer’s appetite. When deciding to sell, I suggest that vendors looking to leave the industry best sell on a confident market. Those looking at staying within the industry are best advised to buy and sell in the same market. Commodity prices are picked to remain strong for the next few years (according to far more acclaimed commentators than I). Land prices per hectare are at levels that I haven’t witnessed in Northland. The premiums available after a comprehensive marketing campaign are without precedent for vendors considering exiting the industry.
Market size diminished as median values increase
The Bayleys Country team has had a frantic past 12 months, with farm sales performing at record numbers. That sentiment is at odds with the story told by the stats. Looking at the total market size for Northland and comparing 2021 with 2022 is an interesting exercise. There were 213 sales of land above 20ha in 2021, with a total value of $387 million. In 2022, the market retracted to 125 deals with a total value of $268 million. While this shows a 30% reduction in total market value, there was an increase in the individual median sales value.
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Around NZ – Northland leads the nationwide patterns!
Northland has transacted more farming properties in autumn in the past eight years than at any other season. This past pattern of behaviour helps offer a degree of certainty around future rural land sales. Interestingly, talking means or averages for dairy farms in the Waikato is a false message. The variety and scale are so massive that the numbers are probably misleading, with dairy sales ranging from $23k per/ha to $70k per/ha. Drystock/grazing ranges from $10k per/ha to $50k per/ha, with each farm needing to be examined on its own merits. The one thing Northland shares with all the other areas is that increased commodity prices have affected all land classes. No longer are small, marginal or hill country dairy farms being overlooked by buyers. With the changing land use in the North, new buyers are lapping these properties up – but for uses other than dairy! In the past 12 months, Northland land values in dairy and drystock have increased significantly (to give an across-the-board percentage increase is misleading). Forestry has driven a great deal of this change. No matter what your feelings about this, the reality is that some farmers have seen fit to take the significant premiums made available. If you want me or one of my team to give you some clear statistics and appraisal values, we are happy to do so.
Country Sales Consultants wanted in Northland
Here is a chance to capitalise on Bayleys nationwide network. Bayleys is renowned for being a market leader in Country Real Estate, with a wide network of contacts and a huge selection of marketing tools. Bayleys Whangarei is committed to growing this team and business. The sales manager mentors and assists other sales consultants to be the best they can. Whether you’re a sales consultant looking to move into country real estate, an experienced country agent or someone new to the industry, Bayleys can guide you to build a rewarding career. Packages can be negotiated; they may include a salary plus commission, or commission only. Bayleys provides excellent induction processes and ongoing training to ensure that you will get ‘up to speed’ with Bayleys systems and processes quickly, allowing you to achieve continued success. The support and resources available to you under the Bayleys brand will add real value to your career and what you can achieve.
To find out more about this excellent career opportunity please contact Tony Grindle in the strictest of confidence.
Tony Grindle 021 432 308 | [email protected]
