Fifteen prospective farm sales around the country failed last week because of the escalating global credit crisis, with some buyers walking away from deposits worth hundreds of thousands of dollars.
A real estate company told the Otago Daily Times funding that had previously been arranged could not be secured in time.
Some of the contracts were unconditional when funding became unavailable, which meant the buyers lost their deposits, in some cases worth several hundred thousand dollars, or had to pay penalty interest. The agent asked not to be named.
For each sale that failed to settle, up to four other land and property deals were affected.
"You have to be in a really strong position to settle a rural real estate deal at the moment," the agent said. The uncertainty had placed many farmers under enormous stress and strain.
It is believed at least one of the failed transactions involved an Otago farm.
The director of rural investment company MyFarm, Andrew Watters, said banks were tightening their lending criteria and he had noted several were not as active in rural lending as they had been a few weeks ago.
"We've had a number of traditional banking partners but some are now sitting on their hands a bit."
Uncertainty due to the credit crunch had forced him to cancel a $30 million syndicated purchase of four Canterbury dairy farms.
He might still buy one of those farms, and he was continuing with the purchase of a King Country farm for dairy support.
"It means we will do a few smaller specialist projects. The outlook is still good, but not as good as it was."
ASB rural banking manager Craig McBeth said his bank was paying closer attention to cash flow.
"When we look at deals, if the cash flow is not there, we are less inclined to look at them now than we would have six months ago, because of the level of uncertainty out there."
He said the bank's funding criteria had not changed and every deal was assessed on a case-by-case basis, but the bank remained confident about the future of agriculture.
Where the ASB had committed to funding a transaction, Mr McBeth said it would not withdraw.
ANZ-National Bank rural banking managing director Charlie Graham said he was aware some farm sales had fallen over, but the bank had not changed its lending criteria to the rural sector.
"We continue to meet all the commitments and obligations that we have in place with our clients," he said.
While funding and liquidity had tightened, Mr Graham said, "We haven't changed our credit policies or lending criteria in any shape or form."
Specialist rural lender Rabobank has also said it was "business as usual". The bank's New Zealand rural manager, Ben Russell, said it would continue with the same approach to assessing loans as it had previously used.
Westpac agribusiness area manager for Otago and Southland, Peter Moynihan, said the bank had not changed its lending criteria for farm purchases and did not envisage doing so.
Directors of a large Canterbury farm, Canterbury Grasslands, were reconsidering a decision to sell the 2700ha business, which consists of six dairy and dairy support farms, north of the Rakaia River.
Chairwoman Sharon Rayne said it was to have been sold privately and the proceeds invested in the company's United States business, but the financial crisis had prompted them to reassess their decision.
Southern Wide Real Estate director Dallas Lucas said he had noted some indecision in the market in recent weeks due to the credit crunch.
"People are more cautious selling and buying, especially buying."
Interest in buying sheep and beef farms for converting to dairying had declined, but Mr Lucas said that was due more to spiralling conversion costs and the greater availability of existing dairy farms on the market than the credit crunch.
