KEY POINTS:
The median sales price for dairy farms has hit record levels on the back of a bumper forecast payout to farmers this season, says the Real Estate Institute of New Zealand.
The median sales price for dairy farms was a record $3.6 million for the three months ending December, up from $3.4 million in the three months to November and $2.5 million in the December 2006 quarter.
Fonterra in December raised the forecast payout to farmers by 50c to $6.90 per kg of milk solids, compared to $4.46 last season - which, with production expected to grow by up to 2 per cent this season, could result in a total payout of $8.8 billion.
The median sales price for all farm types was $1.7 million, compared with $1.5 million in November and $1.2 million the previous year.
REINZ national councillor and rural spokesman Peter McDonald said competition between farmers and new investors for increased exposure had pushed the rural sector to a new level.
"Earlier this year the Institute predicted an increase in the price of dairy properties as the selling season began," McDonald said. "That prediction has been realised and the demand for dairy land has also impacted positively on the price of finishing and, to a lesser degree, grazing properties."
Grazing property was the largest single category with 332 farms sold during the quarter.
Overall sales totalled 753 farms, compared to 684 in the three months ending November and 620 the previous year.
"I think that in the medium to long-term range that pricing looks sustainable maybe even there could be predictions that they might go higher."
The median selling price for arable farms was unchanged from November at $1.8 million, although this was still up from $1.3 million in the December 2006 quarter.
The median selling price for forestry units was $350,000, up 46 per cent on November.
The median price of lifestyle properties rose $5000 to $455,000 in December, although slightly fewer properties were sold.
Rural property
Three months ending December
* National median farm sale price: $1.7 million,
* Record dairy farm median price: $3.6 million,
* 753 farm sales compared with 620 the previous year.
