September 2019 Market Update
As winter makes way for spring, change is definitely in the air in the Waikato. And I’m not just talking about the seasons – there’s a whole lot of it going on for the dairy industry.
Between changes to the banking sector’s lending ability and appetite, less favourable payouts, and now the Government’s new freshwater management proposals, people’s confidence has taken a big knock in terms of business going forward.
Change is often difficult to interpret until it’s happened, but my view is that it’s just a period we’re in, which farmers have to work through while they focus on what they do best.
I can’t help but think that if you take all these things that people are seeing as issues, like lower interest rates and payouts, you might see quite a big opportunity in terms of the strength of a dairy farm business. The big picture’s actually looking pretty good.
We’ve had a very favourable winter, with great growing conditions and little pasture damage. It looks like we’re cracking into a fantastic spring. Milk volumes are up, cow conditions are great, and payouts are improving.
Land prices for properties with quality soils and flat contours are holding pretty firm. However, land with contour issues or sensitive land – land with soils that leech quickly, without filtering – is more of a challenge however we are working our way through these challenges as they arise with our team of technical advisors so that sustainable business models can be maintained now and into the future.
With more restrictions on the banking sector, both bankers and clients need to make sure that the business proposition can remain intact in the future. That means more people are involved in the due diligence side of things, and longer timeframes to complete.
The selling environment is definitely going to be frustrated, no question, but deals will be done. As a seller, having all your compliance data and details in place will only add value and give you a better end result. The key is to be in tune with what the market is prepared to offer, and to be patient. After all, unless you get a fair market price there’s little incentive to cash up and put the money in the bank unless the sale is absolutely necessary, interest rates being what they are.
Long term, land is still a pretty safe haven in terms of investment. After all, we’re always going to need to produce food. But I think we’ll probably see high-protein crops become more popular as consumer attitudes towards dairy and meat change.
A successful marketing strategy is still based around having a good marketing package and spreading it out over a longer period of time to conclude with a tender or deadline sale. That’s not a guarantee that the property will sell on the given date, far from it, but we’re increasingly seeing serious expressions of interest and the property selling after a period of due diligence and negotiation.
So really, it’s more of an interesting time in the industry than an especially worrying one. We’ve had a number of good sales being quietly achieved, and I can see that continuing for the foreseeable future. Certainly, we found Fieldays to be a pretty positive atmosphere – that was a fun few days!
Are you thinking about your next move? Then give us a call for a friendly chat about how we can help.
JULY 2019 Market Update
Winter is just about upon us again! It doesn’t seem that long since we were all firing up the BBQ, but here we are, waking up to frosts.
It’s fair to say that the market hasn’t been what you’d call buoyant since our last update. REINZ figures for April 2019 paint a somewhat gloomy picture for dairy farm sales, with a 50 percent drop in volume and a 16.1% drop in the median price per hectare since April 2018. It’s telling a definite story about the general price trend, and there doesn’t appear to be much to halt that process.
This is all part of a cycle. For most farmers, their land has only gone up in value over the last few years, and land costs have got so far out of kilter that the only way for them to go is down – or at least, stay flat for a long time.
But there are still buyers prepared to operate! They’re much more choosy about properties, though, and are focusing on location, contours, infrastructure and compliance, so vendors need to weigh all that up.
It’s acutely apparent that banks have very little appetite for rural lending at the moment. Unless you have a really robust business proposal, getting money from them will be difficult. With land values dropping, there’s the possibility of farms ending up in the strange situation of having negative equity portfolios but remaining cashflow positive.
Compliance has become a huge part of a farm’s sales proposition in the last few years, as regular readers of my updates will have noticed. There’s a reluctance among some farmers to adopt these measures, but it’s absolutely paramount now. If you don’t want to deal with compliance, then you should engage someone else to do it and focus on your strengths, but there’s no way round it.
If you’re selling, you absolutely have to recognise the importance of compliance and a genuine history of farm records. Any sales are going to be based on the strength of the business, because they can’t rely on capital gains. Make sure you’ve got your fundamentals organised to best practice before going to market.
So now’s the time to start thinking about spring campaigns. Properties are still selling, it’s just a patience game. And with Fieldays around the corner, Farmlands is offering you a special deal. If you sign up for a marketing campaign – for now, or for spring – between 10 and 21 June, you’ll receive a 20 percent rebate from Farmlands’ standard commission rate.
And if you’re coming to Fieldays between 12-15 June, drop by and see us! Farmlands will be at sites F103, 105 and 107. It’s always a fun few days and we’re really looking forward to it.
In the meantime, stay safe, stay warm, and if you’re ready to start thinking about selling or buying, you know who to talk to.
March 2019 market update
I don’t know about you, but over here we’re well and truly ready for some cooler weather to kick in! From what we hear, we aren’t the only ones. As this big dry took hold, it seemed to really tone down everyone’s enthusiasm.
So the market in the dairy sector’s been a bit flat this summer. Farmers are putting all their efforts into mitigating the effects of the heatwave and dry spell, and I wouldn’t expect much to change on that front until the rain comes. A lot of prospective vendors and buyers are choosing to sit tight and see what happens.
That said, there’s a real plus in that Fonterra is making inroads into fixing its own areas of business that aren’t working, and lifting its performance. That means the forecast is looking pretty positive and I think things will come right once the weather does. We’ve had some recent farms that sold fairly well, though it’s definitely taking longer, with buyers doing more due diligence.
You’ll have seen the looming prospect of a Capital Gains Tax in the news lately. I actually don’t see it as being too much of a problem in the farming sector at this stage. For most people, the capital gains component of a farming asset is still flat to declining, and I don’t think there’s a lot of risk of that changing if the CGT proposal goes ahead in 2021.
Also, the banks’ attitude and criteria for lending have changed. They’re focused on making sure that farming businesses are cashflow-strong, and that borrowers can pay off both interest and principal. If the numbers are tight and the borrower is relying on capital growth, they’re going to be reluctant to lend anyway.
The bottom line is that there’s still a bright future for the farming industry. No doubt things are changing, but everyone’s working really hard to make sure all those environmental protection boxes are ticked to keep it sustainable. It would be nice if we heard more about the positives in the media!
Going into autumn, our focus is on talking to vendors about their marketing for the coming spring. That seems like a long way off, but compliance is so important nowadays that you need all your ducks in a row before listing. Key things to have in place are establishing nitrogen reference points, and checking that compliance requirements for areas such as effluent are being met. If there are deficiencies there, we can work with our Farmlands technical field officers to remedy them so the property’s ready for sale.
As far as selling properties goes, vendors do need some patience at the moment. We’re seeing the best results from deadline sales and tenders, but they’re taking five or six weeks rather than three or four. One thing we have noticed however is that all the key market drivers are still there, though the swings up and down seem to be quicker, so I’d still consider things ‘steady as she goes’.
And we’re counting down to Fieldays! It only seems like a few weeks since we were at last year’s. We’ll be releasing some good shareholder incentives there, so keep in touch to find out more.
In the meantime, if you want to talk about your property and how to get the best price for it, just give us a call – we’re always full of ideas!
December 2018 market update
Can you believe it’s December already? It feels like we’ve only just cleared away the debris from last year’s Christmas, but here we are again!
It’s fair to say that it’s been the most spectacular spring start we’ve had in many, many years. This is great news for the farming industry because it means that everyone should be pretty well set up to head off any summer challenges. Farmers are in a great position to have a top season.
In terms of the market at this tail-end of spring, there’s been a lot more choice for buyers, especially for dairy farm listings. Well-located farms with good infrastructure and compliance are certainly selling, though the increased volume has meant values are down a bit from this time last year.
Vendors seem to be getting in tune with where the market’s going and setting their expectations accordingly. Values are definitely being matched to versatility, and farms where the infrastructure and compliance requirements are up to scratch are definitely commanding higher prices. We’re really seeing that in sheep and cattle properties – there have been a number of those on the market recently, and
well-farmed ones are selling particularly well.
We’re expecting that from about now we’ll be entering the normal quieter holiday period, but come the late summer and early autumn activity will start to ramp up again.
You might have heard in the news recently about Fonterra lowering its forecast payouts. While that’s not exactly a confidence-builder, it’s good to remember that there are other players in the market and other factories. It’s certainly unfortunate, but smart operators will look at all the options – and most farms will produce more than enough to offset those reduced payouts anyway.
I also wanted to mention that, despite the perception that banks’ doors are closed for rural lending, that’s not quite accurate. The numbers have to work, but if they do and it’s a good property, banks are keen to do deals. There’s also private equity money available for good investments through agriculture, which is welcome news as it might help matters with the offshore investment shutdown.
Tenders are still proving to be a worthwhile sales approach. Even if they don’t sell in the allotted timeframe, the generally sell very shortly after. Auctions have been good for really top-notch stock – we’ve even been making pre-auction sales to buyers who just want to secure the property without going through that process.
Our best strategy is still to have a robust marketing campaign in place. We want to make sure we check under every rock for the best buyer. We never want you to be left wondering if you could have done better!
Of course, this is the time of year for reflection on where we’ve been and where we’re going. And if, in the New Year, you think it’s time to take your property to the market, give me a call. I’d love to see what you’ve got and find you those buyers.
I wish you a safe and happy Christmas, and a relaxing, prosperous start to the New Year.
September 2018 market update
The end of winter is always a great time of year – we’re mostly past those grey miserable days, and can start looking forward to more sunshine and daylight hours!
It’s also the time when the real estate market starts to show signs of life again. There’s usually a slow-down over winter, and this year was no exception. We’ve still been seeing buyer enquiries for properties with a fair market value, but the general price trend for the last three months to the end of August slipped slightly compared with the same period last year – for dairy farm sales, from $37,842/ha (over 26 sales) in 2017 to $30,830 (over 24 sales) in 2018. Finishing units were also slightly down from $30,566/ha (24 sold in 2017) to $28,011 (28 sold in 2018) and Fonterra’s payout position is still somewhat unclear, but overall the market was reasonably stable.
The tail-end of winter has been busy however, and we have a number of excellent properties lined up to come on the market in the spring. There’s a nice diversity, with a mix of dairy farms, cropping and grazing farms, and sheep and cattle properties, and we’re ready to get to work on marketing them!
We also had a great time at Fieldays in June. It’s always a fantastic catch-up event for the Farmlands co-op, and I was delighted to see so many past and present (and, hopefully, future!) clients there.
While there’s still some concern over the M.bovis outbreak, it doesn’t seem to be having a great effect on the market in this part of the country. It’s possibly driving people to be more self-contained, not moving young stock around, and keeping smaller herds, but those are sensible precautions to take.
Overall, people in the farm industry seem nicely positive about their position. While there were some trying wet patches over the winter, we’ve got some great grass growth happening right now and the weather is being really kind. Long may it last! There is the possibility of a drier than normal summer, but now’s the time for farmers to put in place mechanisms to mitigate possible issues, such as growing some extra crops for summer feed.
In terms of the number of properties on the market, we’re looking at normal seasonal activities. Buyers want to see that farms are compliant, the productivity history is good, there’s potential for sustainability, and there’s good quality land with flat terrain. Anything that ticks all the boxes is keenly sought after! However, it’s interesting to note that as fewer boxes are ticked, the interest in them drops off much more sharply than in the past.
If you’re selling, then, it’s never been more important to make your property as appealing as possible to potential buyers. You might be interested to know that Farmlands have a raft of technical people who can help you add value. They can help with issues around compliance and production, or suggest other ways to set yourself up to obtain the best price. Even small changes can make a difference.
For a friendly discussion about strategies or market expectations for your property, give us a call. Rural real estate always looks at its best in spring, and it would be a pleasure to get to work on yours.
Enjoy the spring sunshine!
JUNE 2018 MARKET UPDATE
I’d like to start this market update by saying that our hearts go out to the farmers affected by the Mycoplasma bovis outbreak, as well as the wider communities who support them. There’s never a good time for a crisis like this, and we hope it can be dealt with swiftly so the recovery process can begin.
For anyone currently considering listing a farm, it might be reassuring to note that, while this is definitely a frightening period, there are still buyers in the market for the right properties. We’re not expecting listings to be especially affected – thanks to those resilient farmers getting on with things and getting that milk into the vats, milk prices are likely to continue rising and farms will remain good investments.
In terms of sales, it’s been a busy tail end of autumn. In fact, I’d call it an exceptional amount of activity. However over the last 12 months farm prices in some areas have continued to ease despite dairy prices moving upwards, with the result that we have more buyers in the market than sellers at present.
Buyers are always looking for those top-quality farms with flat contours, which are well-presented, and in a good location. With the added challenge of M. bovis, there’s also strong demand for farms to be fully self-contained. Properties with grazing, especially for young stock, are sought-after; take away the requirement to move stock around different farms and you eliminate potential risk.
For us within the Farmlands co-op we’re doing a lot of work on best practice around farm visits. We’re taking biosecurity protocols very seriously, especially measures like decontaminating shoes and cleaning vehicles thoroughly. We’ve also suspended open day events to make sure that our vendors are not put at any transfer risk. All inspections are being completed on an appointment-only basis, following Farmlands’ strict industry-approved guidelines.
But on a positive note, the warm wet autumn – up till now, at least! – has made for phenomenal growing conditions. Most farms are very well set up for the winter and spring. Aside from M. bovis, things are actually going pretty well – milk prices look strong and interest rates are stable.
The next exciting event in our calendar is, of course, Fieldays, from 13-16 June. You’ll find us at site F103-109, and we’ve got some great deals for Farmlands shareholders who are looking to be listing in the spring. And if you’re not already a Farmlands shareholder, but want in on those deals, talk to us about how to become one!
For selling, setting definitive timeframes still seems to be delivering results, more so than listing with a set price. This way, buyers decide what a property is worth to them based on their due diligence, which gives them confidence in making their offer.
But so much of it depends on your property. So if you’re considering selling, and you’d like to talk through pricing and marketing strategies, get in touch today.
Stay safe, stay warm, and we’ll look forward to seeing you at Fieldays!
MARCH 2018 MARKET UPDATE
What a summer we’ve had! It’s most definitely been a busy (and hot) one, but over the last few weeks things have quietened down and we have a bit of breathing room to get people through their settlement processes. We’re also thinking ahead, and are working with some more vendors on their marketing strategies for next spring.
Over the summer we’ve settled nine dairy farms and grazing blocks, plus we’ve worked through several lifestyle block sales. It’s certainly shown that there’s no let-up in the desirability of the right farms in the right locations – farm buyers are discerning and quite disciplined, and are prepared to wait for the right property to come up. And when it does, they snap it up!
While the dairy industry has definitely had some negative issues to deal with, such as the Mycoplasma outbreak, everything is looking pretty stable as we head into autumn and winter. The government stance on overseas investment will certainly have an impact on bigger operations as it’s reasonably difficult to raise capital in New Zealand, so we’ll be watching that with interest. But we’ve had a reasonable dairy production season with fairly stable payouts, and most people are well set up to go into winter. Generally the industry’s looking solid and there’s nothing currently looming on the horizon that looks like it’ll disrupt that.
If you’re thinking of selling, it pays to note that there are more checks and balances on properties than there have been in the past. The more information a vendor can provide from environmental and compliance standpoints, the more valuable the property. Banks want agricultural businesses to be strong, viable and profitable, rather than relying on capital growth as a lending proposition. No doubt this has made some properties harder to shift, and it’s definitely something for smart vendors to be aware of.
As far as methods of selling go, we’ve had a good run with tenders this summer. Obviously, definitive timeframe processes are still working really well. That said, we’ve had some positive auction results, too, so it’s worth discussing your options with us.
Hopefully you’ve got Fieldays marked in your calendar for June – we’re looking forward to it! We’ve got some big promotions coming up for listing during the event, so keep an eye out.
And as always, if you need advice on buying or selling your next rural property, come and see us. Our door’s always open and we’re always ready to give professional advice.
december 2017 MARKET UPDATE
Isn’t it great to be getting those long sunny days and to be able to get that BBQ on again? Except for the Christmas shopping, which always comes around too fast!
The rural real estate market’s been fairly steady this spring and we have sold a number of farms. As always, the farms we call ‘A Grade’, with good soil and flat contours, are hot property and selling fast. Some of the ones we’d class as ‘B Grade’ are going, too – but properties of lesser quality than that are proving to be a harder to sell and are price sensitive in the market.
While prices are trending down a bit from last season’s values, we attribute that to there being more properties on the market. In previous seasons we’ve had fewer than normal, mainly driven by those three downturn years – now we’re in catch-up mode.
Though payouts are under pressure to drop a bit, I don’t think that’s likely to change the overall positive outlook, with this Waikato summer looking like it’s going to be hot, some rain is forecast to be amongst it. As people start understanding what’s gone into the sales that have happened in the various classes of land, that should give some confidence of likely prices.
So what does make up the quality of a piece of land? There’s the location, the contours, and ease of farming it. Then there’s the soil type and the production ability of that particular soil. If all the resource management is up to speed, that will add value. Then there’s the quality of the buildings – if any aren’t up to standard, how much capital will it take to get them there? Increasingly farmers are looking for cash returns out of their investment, rather than banking on capital growth.
Going forward, the sales environment looks stable. We have good qualified buyers for particular assets, and though the new directive to the Overseas Investment Office is due to come in on 15 December, it’s too early to determine if this will have an effect.
If you’ve got a farm to sell, my advice is to do it carefully! Properties are still going to auction, but with very little bidding participation. We’ve had a number of good results recently through a tender process, with a finite date to submit. This method seems more effective than an auction process; it doesn’t lock out serious buyers who might need just a bit more time for due diligence.
At the moment, there’s good bank support to participate in buying and upsizing, and there’s nothing much standing in the way of selling – providing of course that everyone’s realistic about prices!
Fortunately, I can help with that. If you want a good idea of what your property might sell for, or if you’ve got your eye on a farm and you’re ready to move, talk to me today.
And Merry Christmas from all of us at Farmlands Real Estate
september 2017 MARKET UPDATE
Aren’t you glad to be seeing the back of winter? We certainly are.
The particularly bleak and grey season this year has put a bit of a dampener on the market, despite the good news of payouts moving upwards. Calving has kept farmers busy lately, and the upcoming election is slowing the economy as we wait to see what new policies 23 September will bring. All of that has led to a relatively subdued market.
That said, market confidence is building and it’s looking like we’re about to head into the next upward cycle. It seems that as soon as those first blossoms come out, there’s a new sense of optimism in the air – we just need some sunshine to go with that!
There are a handful of good farms coming on the market. There’s been an expectation that a huge number will become available, but to me it’s looking like we’ll be seeing normal spring activity. There’s still plenty of interest in ‘tier 1’ farms, the particularly desirable ones with good soil and flat contours.
On the Healthy Rivers: Plan for Change accord, discussions and activity is continuing around getting farmers to be proactive about how it will affect their farming. The proactive ones are seeking out qualified professionals to assess their farm within the new guidelines, and in my opinion that will put them at a big advantage.
Lately I’ve noticed strong activity among buyers for support units, which could be linked to the Healthy Rivers accord. Support units allow home farms to get their winter cows off the land for a few months, giving the paddocks and waterways a bit of a rest. It’s an interesting alternative to investing in a conventional farm.
If you’re thinking of listing soon, we’d still recommend an auction or tender process, which are still producing the best outcomes for our vendors. Setting a finite sale date will make sure the ball gets rolling quickly and keeps up its momentum, otherwise buyers keep looking around for other opportunities to compare and never reach a decision!
Along with that, of course, you want a good structured marketing plan – which I can certainly help you with. And if you need any further encouragement, this spring is a great time for Farmlands shareholders to be selling. Co-op members benefit from discounted marketing rates, commission concessions and Airpoints or Choices points, which you can spend however you want.
With spring in the air, now’s a great time to get moving on selling your property or buying your next one. Get in touch with me today – there’s no time like the present.
may 2017 market Update
The woollen blankets are on the bed, the wood’s in the burner, and those Waikato mornings are getting misty. Autumn is in full swing!
It’s been an interesting time for the market, with activity a bit confused. There’s a shortage of properties that meet buyers’ specific criteria, but it’s also proven hard to move those that don’t quite fit those criteria, which is surprising. What it seems to show is that buyers are willing to wait for the property that ticks all the boxes. Yet according to REINZ, sales overall have been higher than at the same time last year!
The Healthy Rivers: Plan for Change accord keeps moving forward. In my opinion, the best thing farm owners can do is work with the process and seek professional consultation on their nutrient leaching levels. Buyers are going to insist on having accurate information, and without that farmers’ property values will be affected.
Of course the big news has been the atrocious weather over the last three months – it’s been tough for farmers, and I really feel for those around Edgecumbe and the Waikato Region in general. There’s some good news to be had in that the milk forecast is going up, and going into winter the grass cover is generally not bad.
Heading into winter, the property market is looking pretty stable. While there are definitely fewer buyers in the market, serious ones are ready to move on the right property. Overwhelmingly they’re looking for location, good soil, and low-cost production model businesses. Sustainable businesses are crucial now that capital growth has stabilised. The highs are higher but the lows are lower, and the cycles have shortened, so it’s important to show provisions for those lows.
If you’re thinking of selling, the best advice I can give you is to be sensitive to the market. In rural real estate the buying pool isn’t always very competitive, and there’s more focus on sensible purchases, not emotional ones.
So a no-price strategy, such as tender or auction, is the way to market a new property. If the market sets the price, the vendor can choose to accept it or not, but if a vendor overprices it will certainly put buyers off.
And that’s something I can help you with. Give me a call, and let’s talk about a marketing strategy. Remember that Fieldays is happening soon 14th – 17th June and that’s a great opportunity to start a pre-campaign for a spring sale. Don’t miss it!
february 2017 Market Update
Happy New Year to you! Now that the usual Christmas rush-and-lull cycle is over we’re seeing a good pick-up in listing enquiries, and we’ve got a number of dairy projects in the pipeline.
While the market is still a little patchy, it’s definitely more buoyant than it was in the winter, mainly thanks to the predicted improvement in payouts for the dairy industry. For farmers who managed to cut back on their costs and reduce their overheads in the last couple of years, this is where all those changes will start to really pay off.
While the number of farms being advertised for sale is a shade higher than normal, there are also properties not being sold. The ones that tend to get snapped up are the ones with particularly good soil quality and flat contours, while those outside that ideal are a little bit more difficult to move. All that means, however, is that we’re in a phase of finding a new price level for those properties – and with skilful marketing and a good auction process, the market will decide what’s fair and realistic.
So in terms of rural real estate, it’s steady as she goes. We’ve had a number of other projects going on behind the scenes, including getting up to speed with the Waikato Regional Council’s Healthy Rivers: Plan for Change accord. It’s intended to set out allocations for farms’ nitrogen-leaching levels, which will have a big impact on Waikato dairy farms. This plan is still in the proposal stages, but we are spending a lot of time upskilling and getting ourselves informed on what the impact might be on our clients, especially in terms of farm values and ease of selling.
Farmlands Real Estate’s joint venture with Matamata Real Estate is going smoothly, too. Matamata Real Estate is run by my wife Joanne, who specialises in residential and lifestyle properties. Our areas of expertise are quite different – for instance, selling a farm is as much about the business as the land – and now all our clients can access specialist knowledge, whatever they’re looking to invest in.
We’re in a fantastic new building at 69 Arawa Street, Matamata. If you’d like to call in, please do so, or for an appointment you can call us on (07) 280 6913.
And as always, I’m ready to talk about your buying and selling plans for your farm – so get in touch.
JULY 2016 Market Update
From Ian’s Perspective
I’d like to kick off this market update with some news of my own – as many of you will be aware, I’ve joined the Farmlands co-op. I’m very happy to finally be able to announce this, and am enjoying the sense of ownership that the shareholders have!
The other piece of news is that my wife Joanne and I have set up a joint venture with Farmlands Real Estate that will enable us to look after all areas of the real estate market in Matamata and its surrounds. She’s the principal of Matamata Real Estate, which will provide services to the residential market, so between us there’s a big net of opportunities we can provide real estate investors with.
On to the market. Winter is typically a slower time and this year is no exception, despite being fairly mild so far. But as with previous years, there have still been a few transactions. The feedback I got after Fieldays was that that the mood from farmers was better than expected – many have been adjusting their businesses and have been surprised at how they’ve managed to cut back on costs.
I’ve also had a number of enquiries from new entrants to the dairy industry – these individuals are looking for somewhere to invest money in outside their term deposits. Being at the bottom of the economic cycle makes it a good time to invest.
However, this is a time of year when there just aren’t a lot of farms on the market. Buyers have a perception that there are hundreds of farms to choose from and are surprised and confused to find this isn’t the case. There’s no doubt that prices have eased and there are many reasons for this, but the bottom line is that there are certainly willing buyers for willing sellers.
The beginning of calving is, of course, keeping attention away from selling decisions. These are typically made in late August and early September when calving is finished. Of course, this depends on the number of properties available at that time. If the market remains as it is the supply will be reasonably tight, but if it changes and more come on the market buyers may want to wait longer for the perfect property.
Whatever happens, it will set the tone for the market going forward. Watch this space!
As always, if you are planning to sell your property, a good marketing strategy is key. The right buyer is out there – it’s just a matter of bringing them to the gate. However do be aware that deals are taking longer to complete because buyers are wanting more checks and balances, but like all good things it just takes time and will happen.
For expert advice on selling or buying your rural property, contact me today.
There’s lots more I can tell you.
April 2016 Market Update
Now that summer’s over and autumn is well and truly upon us, we’re seeing the rural real estate market go into that typical end-of season wind-down mode.
Despite an increase in dairy farm listings at the end of 2015, a number of campaigns have either remained either unsold, or have sold at softer levels than at the end of 2015. That said, however, some strong results have been achieved for farms in good locations with a range of uses or ones that are strategic acquisitions.
So why the slow-down in sales? Real estate is like any market driven by confidence – when confidence errs on the side of caution, sales do tend to slow. But I think that well-informed buyers who are in it for the medium- to long-term will keep looking for growth opportunities. In terms of value, some farms will come under pressure, while others will go for levels similar to Q4 of 2015. It’s important to note that time frames between the opportunity and completion will definitely take longer, as today’s return environment means that more due diligence will be conducted.
On the plus side, the weather has been better than expected for most – El Nino hasn’t had the impact on production that was forecast last year. Most farms are now well set up for their autumn and winter feed requirements, which should improve operating expenses thanks to less imported feed on the balance sheet.
Looking forward, the rural property market remains stable. It should stay this way for some time due to farm working expenses being adjusted to cope with lower payouts, which are expected for a little longer than first thought. The positive of this is that buyers are still in the market, and the outlook remains stable while we wait for income streams to improve – which most farms are now well-positioned to benefit from!
If you’re selling, the most essential elements are a good strategy and a well-planned timeframe. Given that bank lending parameters have tightened, approval is taking five to six weeks to come through. Therefore, campaigns run to a short frame shouldn’t be expected to get the best outcome.
If you’re thinking about going to market and you want to discuss a winning strategy, please contact me for a confidential review and a strategy update today.
You’ll be glad you did.