Otago farm sales for December were down 60%, reflecting a national slump with no improvement in sight, as financing for the rural sector remains tight.
While December is usually the peak period for dairy-farm sales, the cost of rural financing is keeping new-entrant farmers out of the market, while those wanting to retire are finding few buyers able to afford the purchase price.
Real Estate Institute of New Zealand national president Peter McDonald said yesterday that due to the economic climate there was a tightening in rural-sector financing, which prevented new entrants from graduating to farm ownership in the traditional way; purchasing, then building on their investment.
"At this stage, there seems to be no indication that this [financing] situation will rectify itself and there is concern that the financial policies in this sector may continue to tighten," Mr McDonald said in a statement.
Nationally, total farm sales were down for the quarter to December by 30%, while in Otago total farm sales for the period were down 60%, from 38 in 2008, to 15 for the quarter to December last year.
The median price during the quarter across the country dropped a third, from $1.52 million in 2008, to $1 million, while the all-farm median in Otago more than halved, from $1.3 million to $630,000.
Nationally, the median dairy farm price fell 21%, from $4.02 million to $3.15 million.
"The drop in the median price is a reflection of the lack of dairy farms sold during this [quarterly] period. The majority of sales are grazing blocks and not dairy farms," Mr McDonald said.
During the last quarter of 2007, a total of 753 farms were sold, followed by 346 sold in 2008, and down to 241 for the three months to last December.
There was a 77% decline in dairy farms sold, when comparing the 133 sold in the quarter to December 2007, to the 30 sold to December last year.
Mr McDonald said Otago's median all-farms price rose from $585,000 in November, to $630,000 in December, but this was well down on the median price during quarter to December 2008 which stood at $1.3 million.
The 15 Otago farms were six grazing, four forestry, three dairy and two finishing properties.
