The rural land market across Canterbury has been reasonably active through the first eight months of 2021. Most properties offered for sale have now sold and real estate agents report a shortage of listings across the different sectors.
Interest rates, while perhaps likely to increase from historically low levels remain low and commodity prices are generally above historical average levels. These factors as well as interest in the agricultural sector from investors appears to have buoyed demand for rural properties.
In the dairy sector, which indirectly influences demand for other farm types, the banks appear more willing to lend and we are starting to see interest in Canterbury dairy farms from non-traditional sources of capital including syndicates, sale and leaseback arrangements and international entities taking a minority interest in proven, larger scale dairy farming businesses.
Anecdotally, demand for leasing or purchasing dairy support land appears to have increased as large scale dairy farmers look to become self-contained to gain greater control of their business.
This means we consider land with a history of growing forage crops for wintering for dairy support to be relatively well received if offered to the market.
The National Environmental Standards for Freshwater 2020 (NES-FW) may have more impact on regions outside of Canterbury with environmental rules and regulation generally understood by participants and their advisors in the wider Canterbury market.
Download our previous market update for arable and support blocks in Canterbury (September 2020).