Property report: An interesting time for the rural market
Jamie Mackay from The Country has had his monthly chat with Peter Newbold, GM of real estate at PGG Wrightson. We all know winter's here - but is it the off-season for real estate sales? Peter says it's an interesting time. They've just come off a high with strong trading and they're now in traditional winter mode. But there is a lot of activity around appraisals, listings and properties that are coming to market early. A lot of that is off the back of sheep and beef hill country opportunities arising through forestry. While it's quiet, Peter says there's a lot of work going on behind the scenes. He's certainly looking forward to a strong spring season.
The big question from Jamie is this: How many beef and sheep farms are going to go to forestry in the next couple of years?
The short answer from Peter is - a lot. PGG Wrightson are getting a lot of enquiries everyday from people thinking about whether they should sell. And the prices being paid by forestry are underpinning all the sheep and beef property values. Consensus seems to be that it's not a bad time to sell. One thing Peter and his team are noticing - and encouraging - is people choosing to use a part of their land for forestry rather than the total property. He cautions that the change in land use will only reveal it's full impacts over the next couple of years in stock numbers and other related factors.
But are these buyers so-called "Queen Street farmers"? Peter concedes they are seeing a lot of urban buyers who are looking at the long term opportunities, especially in the higher value properties - 20 and 30 million dollars plus. And with strong prices, a lot of existing landowners are increasing their property sizes.
Jamie then turned to dairy property values. The past couple of years had seen hesitancy above 10 million dollars. Has this disappeared?
Peter says it has. You're definitely seeing people spending over 10, 15, 20 million generally. Dairy properties are more challenging as they don't have the forestry factor that's underpinning sheep and beef properties.
One thing Peter is becoming more aware of is the need for vendors to take into account the fact potential buyers are doing more due diligence. Especially 'round allowing for future market downturns. Peter says this is a fact of life these days and you've got to leave something for the next person who comes along.
Jamie points out that lifestyle listings are still in demand. He puts this down to people post lockdown looking for a bit of space. Peter agrees, saying there's still good interest in the lifestyle market for good properties out of town. He emphasises that a lot of smaller communities have all the services and benefits of a big city.