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Buoyant New Zealand sheep and beef market

Buoyant New Zealand sheep and beef market
A buoyant pastoral sector has led to renewed interest in land acquisition, according to Colliers’ sheep and beef property experts.

Nationally, 963 livestock properties traded hands in the 12 months to June 2021, according to REINZ.

This saw the number of sales return to the 10-year average of 976 per year, from just 713 in the 12 months prior.

The REINZ data also shows an increase in values with the median sales price increasing from $17,450 per hectare to $20,725 per hectare in the past 12 months, up from the ten-year average of $17,517 per hectare. 

Richard O’Sullivan, Director at Colliers Canterbury who specialises in pastoral sales says the spring season following the Covid-19 lockdown in 2020 marked the beginning of a rebound in the sheep and beef sector. 

“In the 12 months leading up to the Covid outbreak in New Zealand there were limited sales of pastoral properties with a low number of listings and varying bank support to allow transactions to occur,” O’Sullivan says.

“Post Covid there’s renewed optimism in the sector with general confidence in New Zealand’s economy and our status as a safe haven leading to more farms coming to market, and higher values being obtained. 

“In the South Island, one of the key drivers of increased demand for pastoral land is positivity in the dairy sector, which has urged businesses to look for additional support land in the 100 hectare to 400 hectare range.

“We are also finding that many sheep and beef farmers are looking to expand by purchasing local properties or divesting their assets and acquiring larger land holdings in other regions. 

“For example, there’s been a noticeable increase in buyers looking for yield-based purchases in the South Island after selling land that has alternative uses, such as forestry or horticulture, for a premium in the North Island. 

“Overall, the clearance rate for pastoral property has improved significantly in the past 12 months with vendor and purchaser price expectations tending to align. 

“The North Canterbury market has been particularly active with ten sheep and beef properties changing hands in the $1.9 million to $5.8 million range, and two larger units selling for more than $8 million in the past few months.

“Glencairn Station, a high-country sheep and beef breeding and store stock property between Omarama and Twizel sold at deadline for $7.7 million after receiving more than 40 enquiries.”

O’Sullivan says increased sales activity has also injected much-needed liquidity into the market.

“We anticipate sales activity for dryland and irrigated properties in the 100 hectare to 300 hectare range to continue to increase in the coming season as capital trickles down into the pastoral sector from dairy farm sale proceeds, farm business expansion, and North Island buyers looking for scale and yield.”

Jason Waterman, Pahiatua-based Rural Sales Specialist, says interest in pastoral property is solid across the Tararua and Wairarapa region.

“We have seen strong interest in all classes of land, with a notable lift in enquiry from outside the local area,” Waterman says.

“Those in dryer locations such as the Hawke’s Bay and Wairarapa are looking to the Tararua district where rainfall is higher, especially in the summertime.

“With the industry showing growth in the past 12 months, local farmers are also seizing the opportunity to expand on the back of good returns. 

“Hill country properties in the Tararua region are proving popular, resulting in sale price lifts of around $2,000 to $4,000 per hectare in the past two years. 

“One example is Gorge End, a 300 hectare property just east of Pahiatua that would have sold for around $5,500-$6,000 per hectare two years ago, but recently sold for upwards of $9,000 per hectare.”

Waterman says first-time buyers are bearing the brunt of increased demand.

“Like all property markets, it’s getting tougher for first farm buyers to purchase their first property.

“With leases hard to come by, progressive young farmers are looking to equity partnership models to get their foot in the door.

“At the other end, retiring farmers are facing tough decisions over where to invest funds with interest rates at an all-time low. 

“Structuring of deals, such as vendor financing being left in the property for incoming purchasers could be a win-win situation for both buyer and seller, and something we see becoming more popular in the short to medium term.”
 

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Richard O'Sullivan

Director

Christchurch (Rural)

Richard brings to Colliers Rural and Agribusiness a strong agribusiness background and a quality network of relationships in the sector. The past 20 years have been spent in technical, agribusiness and banking based rural roles gaining diverse experience across finance, operations, farm development and sales/syndications.

With a reputation for providing informed and sound judgement and delivering results, Richard is committed to achieving the best possible outcome. The completion of recent dairy, grazing and sheep and beef farm sales in the region complement the above skills with market and buyer knowledge to achieve the desired outcome for clients.

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Jason Waterman

Rural Sales Specialist | Tararua & Wairarapa

Pahiatua

Jason has played a key role in establishing the Colliers Rural and Agribusiness brand in the Tararua and Wairarapa region. As a natural born relationship builder with a passion for the rural community, Jason prides himself on his people skills, his strong negotiation abilities and the exceptional customer service he provides to clients. Born and bred in the Tararua district, having been bought up on a family farm in Waione, both farming and sales have been a major theme throughout Jason’s career. With 16 years of practical farming experience behind him, including time spent in Dannevirke, Eketahuna and Pahiatua, Jason, along with his wife, Kirsten, leased a farm for ten years which eventually allowed them to purchase this property. Jason worked as a Technical Field Rep for PGG Wrightson, advising clients on animal health, cropping, fertiliser and development plans for farms. During his time with the company, Jason built strong relationships which lead to outstanding sales results, winning numerous awards that recognised his achievements. Jason also spent five years on their national retail advisory group, where he developed and rolled out a national training programme for staff.

Jason’s natural affinity for people combined with his results-orientated drive, has seen Jason excel in his chosen field and build a strong network of contacts across rural Wairarapa along the way. Jason is very involved in the local community through various sporting codes. He was the Club Captain for the Eketahuna rugby club for eight years. Currently he is the Club President of Tararua Squash Club and assists co-ordinating a local discussion group. Jason enjoys spending time with his wife and young daughter as well as participating in squash, cricket and trying to get the odd hunt or dive in. Jason has lived in the Tararua district his whole life. The people and the relationships he has formed is what he loves and he is looking forward to using his knowledge of the area, rural expertise and sales skills to help others achieve their goals in life.

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