New Zealand Dairy Property Market Experiences Resurgence

The New Zealand dairy property market is experiencing a revitalization following the challenging period of the Covid-19 pandemic and rising on-farm costs. Recent months have shown significant growth in market activity, with Fonterra’s 2024/25 season forecast Farmgate Milk Price at a midpoint of $10/kgMS, providing farmers with much-needed optimism.

Shane O’Brien, director of rural & agribusiness at Colliers Christchurch, reports increased activity particularly in the Canterbury region as purchasers actively seek expansion opportunities and investments due to the hard work farmers have put into maintaining profitability. He notes a resurgence in equity partnerships, a trend not seen for several years, with buyers drawn to farms that are well-maintained and exhibit strong management and compliance.

Interest rate cuts by the Reserve Bank have had a lesser impact on the rural sector compared to residential properties. Nonetheless, the 2024-25 season has already seen 25 dairy properties sold in Canterbury, a notable increase from the previous year. Noteworthy transactions include the sale of a 179ha Tier 1 farm in Methven for $10.2 million and another significant sale near Ashburton for $9.7 million. O’Sullivan, another director at Colliers Christchurch, highlights that buyer confidence is at its peak of the decade due to favorable regulatory conditions and robust financial support from major lenders.

In Otago and Southland, Ruth Hodges, director at Colliers rural & agribusiness, notes a strong demand with 24 sales recorded in the current dairy season, some even reaching prices unseen since the Global Financial Crisis, like a sale surpassing $50,000 per hectare. However, areas like Gore and Clutha have shown more subdued activity, with only five recent sales.