Farm sales stay low, lifestyle property prices hold up

There are signs of renewed interest in rural land, says the Real Estate Institute

Lifestyle property prices are holding up, but it is too early to tell if rural property sales have recovered given the low turnover in dairy farms, the Real Estate Institute said today.

The median price for lifestyle properties for the three months to March was almost flat on a year earlier, at $448,500 compared with $450,000 in the March 2008 quarter, the institute said.

The number of lifestyle property sales fell to 1041 from 1484 a year earlier.

The median price for farms sold during the quarter fell to $1.175 million from $1.685 million a year earlier. However, the price was comparable to the same period in 2007.

"We're now seeing the market adjusting to the affordable and sustainable levels we saw in the same period in 2007, before the unrealistic spike in 2008 caused by the high Fonterra payout," said institute rural spokesman Peter McDonald.

Only Hawke's Bay, Taranaki and the West Coast showed a rise in prices.

Turnover remained low at 231 farm property sales from 717 sold a year earlier. Canterbury and Otago showed the biggest drops in turnover.

"With the small turnover in dairy farms, it's not realistic to state with total assurance the market has turned around," said McDonald.

However, there were signs of renewed interest in rural real estate, he said.

- NZPA