Grass conquers trees in market

The slowdown of forestry conversions in the dry stock land market has opened the way for more pastorally competitive offers, with valuations aligning well with realistic livestock returns farmers are seeking.

Council regulations in regions like Gisborne, and the nationally enforced changes to what land can and cannot be planted in trees based on Land Use Classification has bought a welcome pastoral shift, says Bayleys Gisborne manager Simon Bousfield.

“We are seeing a real mix of properties come onto the market ranging from 400ha through to 1400ha that are drawing strong interest.

“There is a real attraction there to good quality farmland, land that has some character to it and may also hold some recreational value in the form of hunting and fishing access.”

“We are seeing a healthy interest from farming families, many from outside the district, and that includes the South Island.”

He has noticed a particular interest from potential buyers seeking good “horse and dog” country, reflecting a desire to be working with some of the elements that drew them to farming earlier in their career.

“And we have our entire portfolio under contract, so it also makes it a great time to consider exiting, the market interest is certainly there,” he says.

In Northland, Tony Grindle of Bayleys Whangarei has enjoyed 12 months of solid rural sales, and he has welcomed the removal of the distorting effect forestry purchases have had in the past.

“You would often hear people say so and so got $15,000 a hectare for their property from a forestry company. But what was often forgotten was this was only paid on the part of the property planted.

“Often a good portion was left as grazing country, for significantly lower price per hectare.”

Northland has enjoyed some healthy land transactions in recent months, including a 300ha property near Kai-iwi lakes selling for $4.25 million late last year, averaging $14,900 a hectare selling to an Auckland restauranteur keen to complete the “farm to fork” pathway for their menu items.

Another 607ha property in the Ruawai district sold after only 14 days online to average $16,000 a hectare, a premium for a property described as immaculate.

Given Northland’s varying contour, he says land deals are often having multiple angles to them reflecting this, with steeper dry stock type country on a farm’s title valued to reflect that, whilst buyers may be building a premium into the dairy type country on flatter parts of the title.

“And of course stock is now a major commitment when you are purchasing that buyers are having to take greater account of than ever before.”

Northland has been fortunate to have enjoyed three years with minimal drought conditions after a sustained period earlier in the decade, and Tony believed this has added significantly to the optimism in the region’s market.

Simon Bousfield also said he was encouraged to see younger families moving onto properties, often in management positions or as part of families extending into larger blocks. They were a particularly welcome to boost community populations in rural areas long suffering a slide in numbers.