Rural Market Begins Seasonal Slowdown Wednesday, Jul 23, 2003
The rural property market’s begun to show signs of a Winter slowdown, as the rural property market statistics for June failed to even near the heights attained in May, although the latest figures are relatively healthy in comparison to June 2002, according to the latest statistics released by the Real Estate Institute of New Zealand. The national sales volume for farms in June was 251, compared to the May sales volume of 275 and the June 2002 volume of 198. The national median farm sale price for June was $620,000 compared to May at $750,000, and the June 2002 median of $620,000.
On month-to-month comparison, of the fourteen districts surveyed, farm sales decreased in eight areas, while the median sales price eased in nine.
According to REINZ rural spokesperson, Mr. Murray Cleland, this is a normal, seasonal pattern.
He said, “On a year-to-year basis, ten regions showed an improved sales volume while eight experienced an improved median sales price. Given the consistent year-on-year national median price and an increase in the national sales volume by 53 transactions, I think it’s fair to attribute the month-on-month easing to the normal winter slow-down, arriving later than expected this year.”
Mr. Cleland, said today one of the key indicators of the confidence in the rural property market is the comparison between the median listing price and median sales price. In June, the Institute’s figures showed a increase in the margin between the listing price and final sale price, compared to both May 2003 and June 2002.
He said, “Based on the national median price, the statistics for June showed that sellers were accepting offers at 4.62 per cent less than the listing price, compared to 2.6 per cent and 3.51 per cent in May 2003 and June 2002 respectively. What this indicates is that buyers are behaving more cautiously, and negotiating perhaps more toughly, while sellers may need to revisit and rethink their expectations in terms of the market value of their property.
“Anecdotal evidence suggests that there remains a shortage of listings and a high level of enquiry, so it also follows that buyer are prepared to wait until the properties they perceive as worthwhile are available. Either way, the balance of buying power appears to slowly be swinging towards buyers.”
The rural lifestyle block market has eased slightly from the record-breaking sales volume of May 2003, the 749 sales recorded during June 2003 a decrease of 21 transactions from May’s 770 sales, but a strong improvement on the 554 sales in June 2002. The median sales price improved by $15,000 from last month and by $32,500 to $255,000 on the $222,500 recorded in June 2002.
Despite the decreased sales, total dollar turnover and the national median price both rose on a month-to-month basis, the lifestyle blocks that changed hands in June sold for a combined value of $241.9 million at a median sales price of $255,000, compared to a turnover of $233.9 million at a median sales price of $240,000 in May 2003.
Mr. Cleland said, “As experienced in the farm market, given the fact the high point of the May statistics has not been replicated this month, the eight million dollar increase in the total dollar value of sales from last month is truly impressive. In addition, on a year-to-year basis both sales and median price have improved.”
The demand for dairy properties eased on both month-to-month and year-to-year comparison, with 28 properties changing hands during June, compared to 45 in May 2003 and 30 in June 2002.
Dairy property values fell from last month and last year, with the June 2003 median sale price for dairy properties at $1,375,000, down from the $1,500,000 recorded in May 2003 and the $1,412,500 recorded in June 2002.
The horticultural property national median price rose on year-to-year comparison and fell on a month-to-month basis, with 31 sales at a median of $538,000 in June compared to 35 sales at $750,000 in May 2003 and 34 sales at a median of $462,500 in June 2002.
Finishing property sales eased on both year-to-year and month-to-month comparison, with 27 sales in June 2003 compared to 36 in May 2003 and 30 sales in June 2002. The median price rose from last month and last year with $1,000,000 recorded in June 2003 and $945,000 in May 2003, compared to $755,000, in June 2002.
One hundred and thirty three grazing properties sold in June, three more than the 130 sales in May and fifty more than the eighty-three sales recorded in June 2002. The median sale price of $525,000 was down from $570,000 recorded in May 2003 but firmed on the $450,000 in June 2002.
The arable property national median price rose on a month-to-month basis and fell on year-to-year comparison, with 10 sales at a median of $1,031,000 in June compared to 14 sales at $996,000 in May 2003 and 11 sales at a median of $1,200,000 in June 2002.