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Property Market Research Series: Canterbury Dairy Farms

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Dairy sales are on the rise

Dairy farm sales increased markedly during 2021 and 2022 with the level of sales topping long-term averages.

Sales also climbed above the levels seen in the market prior to the changes to the Overseas Investment rules that restricted overseas investors from purchasing New Zealand land.

Generally, increased market acceptance of farming within nutrient limits has provided a sense of renewed confidence in the Canterbury dairy farm property market.

In 2021/22, across the wider Canterbury market, we are aware of approximately 40 medium to large-scale dairy farm sales, sold either on or off-market, with a total sale value of approximately $465 million.

 2022_08 SI dairy listings only
Listings numbers and change since last year. Source: and Colliers Rural Valuation

Capital availability is improving

The record milk price for the 2021/22 season and the prospect of a sustained period of high prices in the immediate future appear to be providing confidence for property buyers, particularly against the prospect of rising interest rates.

Previously, the dairy farm property market struggled with a lack of available capital. Firstly from restrictions on overseas purchasers, and then from a more cautious approach by the banking sector when higher equity levels were required.

The Government’s fiscal stimulus in response to Covid-19 delivered a boost, and we are now seeing some of that capital making its way into the rural economy.

This selling season has seen the return of larger farming businesses to the market with the New Zealand Super Fund an example of a large-scale investor that is looking to purchase quality, Canterbury dairy farms.

The buyer pool for dairy farms appears to have widened during 2021/22 with increased interest in dairy farms from sheep and beef farmers looking to diversify their farming operations, as well as off-farm investors and equity partnerships. There has also been strong demand for sale and leaseback purchase agreements.

2022_08 Canterbury Dairy Sales Graph

Previous dairy research:
South Island Pastoral Farms  |  June 2022
South Island Dairy Farms  | April 2022
Canterbury Dairy Market Update  | December 2021
Canterbury Dairy support and arable land market  | September 2021
Southland Dairy Property Market Update | August 2021
North Canterbury Sheep and Beef Property Sales Map  |  May 2021
Canterbury Dairy Property Market Update | April 2021
Southland Dairy Property Market Update |  March 2021
On-farm infrastructure

Farms with a secure physical resource base, including irrigation water and environmental compliance have continued to see strong sales results with competition between buyers leading to higher prices being achieved.

Farm efficiency has also been a key driver of value in the current market, with many farms replacing sprinkler irrigation with fixed grid irrigation providing labour and irrigation efficiencies and productivity gains.

Current building material shortages and high building costs mean dairy farms with good quality housing and no future requirement for capital development also achieved strong prices.

The closure of the border and difficulty in attracting farm staff together with the implementation of the Healthy Homes standards have likely increased demand for properties with a good standard of housing.

Operational considerations

Alongside higher prices being paid for dairy farms, the operational disruption caused by the Mycoplasma bovis outbreak together with recently introduced national environmental standards have led to a clear preference for dairy farmers to secure feed and control heifer and winter grazing in-house.

Land scarcity and current high milk prices have led to external graziers increasing their prices for grazing and wintering in 2022. As a result, we are aware of farms with a history of growing forage crops for wintering dairy cows selling at almost the same rate per hectare as dairy farms.

Read the full commentary and market evidence via the link below.

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Property Market Research Series: Canterbury Dairy Farms

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Related Experts

Tim Banks

Associate Director | Rural Valuation

Christchurch (Rural Valuation)

Prior to joining Colliers, Tim had 25 years agribusiness banking experience in the North and South Island in relationship management, business development and senior leadership roles.

He completed and peer reviewed rural valuations throughout his banking career.  His banking skills include agribusiness finance, credit analysis and rural valuation.

With his wife he owns an irrigated, intensive stock and cropping property in North Canterbury.

The family property was leased prior to farming meaning Tim understands the lease market, has experience dealing with lessor and lessees and negotiating lease agreements.

Tim brings to the Colliers Rural Valuation and Advisory team agribusiness banking and practical farming experience, an understanding of irrigation and environmental compliance as well as a strong network of farmers and their advisors.

His focuses are all types of rural land valuation throughout the South Island and advisory work in the rural sector.

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Jeremy Ryan

Valuer | Rural Valuation

Christchurch (Rural Valuation)

Jeremy grew up on a sheep and beef farm in Mossburn, in Northern Southland and has been part of the farming industry his entire life. 

He completed a Bachelors of Land and Property Management at Lincoln University, majoring in Rural Valuation with a specialisation in Primary Production.

In 2021 for his last year of studies, Jeremy was awarded the Colliers Rural Valuation Scholarship. In December the same year he started a two-month summer internship with the Colliers Rural Valuation team in Invercargill.

Jeremy has been based with the Christchurch team since February 2022 and is currently working toward his registration.  His areas of interest in rural property include dairy, pastoral and specialized livestock properties. 

He is currently concentrating on rural property valuations for dairy, poultry, sheep and beef farms for the purposes of mortgage security, rental assessments and financial reporting for private and corporate clients primarily in Southland, Otago and Canterbury.

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Greg Petersen

Director | Rural Valuation

Christchurch (Rural Valuation)

Greg is an experienced registered valuer and leads our Canterbury rural valuation and property consultancy team in Christchurch.

Greg specialises in the valuation of rural property throughout Canterbury and the South Island. His work for the firm has included financial reporting valuations of large scale rural portfolio’s, compensation assessments for major infrastructure projects and one off individual farm valuations for lending, estate and development purposes.

Greg offers our clients excellent technical skills and he has a highly developed understanding of the public sector and relevant legislation. He plays a lead role in our corporate dairy farm valuation work, high country, infrastructure compensation and in other valuation practice areas.

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Luke van den Broek

Associate Director | Rural Valuation

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With over 13 years’ experience in providing valuation and advisory services throughout New Zealand, his expertise covers rural land valuation and advisory matters throughout Canterbury and the South Island with emphasis on valuations for bank lending, financial reporting and insurance.

With broad property knowledge, excellent technical skills, a personable nature and industry understanding, he is well positioned to provide valuations and advice, specialising in dairy, arable, pastoral and intensive farming operations.

His specialist knowledge coupled with attention to detail and his drive for excellence, and continuous professional development, mean he is a valuable and trusted advisor to his clients.

Luke van den Broek,  MBA | BBS (VPM & Agribusiness)
Registered Valuer

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