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Rural Property – Activity Eases As Winter Looms

Rural property activity is beginning to slow as winter looms, with the national sales volume easing from last month, and the Institute is predicting relatively subdued sales from now until spring, according to the latest rural property statistics for April 2003, released today by the Real Estate Institute of New Zealand.

The national sales volume for farms in April was 254, compared to the March sales volume of 290 and the April 2002 volume of 253.

The Institutes rural spokesperson, Mr. Murray Cleland, said today that the month-to-month easing in volumes is largely a seasonal effect, adding that the national sales volume compared favourably with April 2002.

He said, “After steady growth in the rural economy throughout 2001 and 2002, the Institute anticipated a slight easing in sales and values in the rural property during 2003 as the market stabilised. This can be seen in the April statistics, as well as the usual seasonal slowdown in sales traditionally experienced throughout Winter.”

The national median farm sale price for April was $700,000 compared to March at $695,000, and the April 2002 median of $720,000.

Mr. Cleland said that the latest median price figures were also in line with the expectations of the Institute.

“The upcoming winter season also tends to have an impact on the national median sale price, as higher value properties, such as dairy farms, are not put on the market during winter. With far fewer million-dollar-plus transactions being recorded, the median price does tend to ease. In this case however, values have remained relatively stable, in that the latest $5,000 to $20,000 movement in national median sales price is not significant.”

The winter season had little effect on the lifestyle block market, as the national median lifestyle block price firmed on both month-to-month and year-to-year comparison, and while the national sales volume eased from last month, it firmed on April 2002, with 678 transactions at a median sales price of $250,000, compared to 716 sales in March at $248,000 and 658 in April 2002 at $230,000.

“In a similar fashion to the urban residential market, values for lifestyle blocks have continued to improve. While sales are slightly reduced from last month, the Institute believes that this is more a reflection of the impact of Easter and ANZAC Day, especially in context of the improvement in sales volume from April 2002”, Mr. Cleland said.

The demand for dairy properties eased on both month-to-month and year-to-year comparison, with 39 properties changing hands during April, compared to 72 in March 2003 and 48 in April 2002.

Dairy property values eased from last month but improved on last year, with the April 2003 median sale price for dairy properties at $1,550,000, down from the $1,700,000 recorded in March 2003 and up on the $1,300,500 recorded in April 2002.

Horticultural property national median price and national sales volume rose on year-to-year and month-to-month comparison, with 49 sales at a median of $650,000 in April compared to 34 sales at $607,500 in March 2003 and 22 sales at a median of $514,250 in April 2002.

Finishing property sales eased on year-to-year comparison, but rose from last month, with 29 sales in April 2003 and 24 in March 2003, compared to 42 sales in April 2002. The median price rose from last month and last year with $852,500 recorded in April 2002 and $835,000 in March 2003, compared to $1,150,000 in April 2003.

One hundred and ten grazing properties sold in April, 34 less more than the 144 sales in March and thirteen less than the 123 sales recorded in April 2002. The median sale price was up from last month and last year - from $412,000 in April 2002 and $507,500 in March 2003, to the $522,500 recorded in April 2003.

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