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Dairy Property Market Research Series: Southland

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2021_08 Saouthland map pegs

Confidence returns in Southland dairy property market

Since our last update in February, the dairy property market in Southland has continued to show improvement with both sales values and volumes continuing to increase on the back of a positive outlook and improved market sentiment.

Since the beginning of 2021, the prices appear to be increasing gradually on the back of a positive outlook and improved market sentiment.

For more historical information, check out our 2020 Southland sales maps and commentaries: January 2020, May 2020, August 2020, February 2021.

The volume of transactions has increased noticeably during 2021 with of over 20 dairy farm sales to date compared to 16 sales overall during 2020. This has largely been driven by good dairy farm returns making the industry an appealing investment option on a yield basis.

There are fewer dairy farms currently on the market compared to previous years (10 in August 2021 compared to 24 in August 2020), although we understand that there are new listings set to come to the market later in the year.  In the current environment, where the returns are high and the forecast for next year is also above the average for the last few years, there is less inclination to sell. Low bank deposit rates are also a contributing factor.

While the buyer profile in Southland largely remains local farming entities looking to either upscale, add to their portfolios, or position themselves for succession, there has been renewed interest and movement by corporate farming groups, out of region investors and equity partnerships.

There is still significant uncertainty and lack of clarity around environmental policy. We are aware that dairy farm negotiations have in some instances required more time to allow for due diligence. There have also been some transactions which have fallen through.

The graph below identifies the net sale price per hectare of A, B and C Class properties in the region since the beginning of 2015 together with key external influences.

‘A Class’ farms represented in the graph below in blue, are typically situated in the Central Southland locality or the area to the east of Invercargill, on flat land with good soils and have a good standard of buildings, farm infrastructure and improvements. Recently, the majority of dairy farm sales have been A or B class properties.

2021_08 Southland dairy sales graph   

Click here to access all our research on the dairy property market in New Zealand, and see the most recent dairy sales maps for Canterbury and Southland.

Follow the links to reach our updates and sales maps on sheep & beef, viticulture, forestry, arable and kiwifruit markets.


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Dairy Property Market Research Series: Southland

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Related Experts

Kate Day

Registered Valuer | Rural & Agribusiness

Invercargill

Kate is a born and breed Southlander. Growing up on a sheep and beef farm in Central Southland gave her an invaluable appreciation and understanding of the area and primary sector.

Kate graduated from Lincoln University in 2015 with a B. Com. Ag majoring in Agricultural Management and Rural Valuation. In her final year at Lincoln she received the Colliers Rural and Agribusiness Valuation Scholarship and consequently joined the company in 2016.

Kate worked out of the Christchurch office for four years, focusing predominantly on valuing properties in the Southland and Otago regions, gaining experience in dairy, sheep and beef, high country, horticulture and viticulture industries. She was also involved in developing datasets, overview analysis and trend commentaries for the Southland and Otago rural property markets for clients and communication reports.

In May 2019 Kate gained her registration and started building her own portfolio of clients in the Lower South Island.

In January 2020 Kate moved to Southland to open the first Colliers Rural Valuation office in the region.

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Ed Percy

Director | Rural Valuation

Christchurch (Rural Valuation)

Ed has over 20 years’ experience in property valuation and agribusiness throughout New Zealand. He is based in Christchurch and travels regularly to the regions. Prior to joining the Colliers International Rural and Agribusiness valuation team he was a senior valuer and business manager of a valuation firm in Central Otago which covered the lower South Island and spent four years as a farm manager on a sheep and beef farm in the Wakatipu Basin. Ed has also practiced as a valuer in Nelson/Tasman, Wellington and the Wairarapa.

Ed has agricultural and forestry interests in the lower North Island, completed the Kellogs Rural Leadership Programme in 2010 and obtained a Master of Property Studies degree in 2015. He has broad property related experience in both urban and rural sectors focusing more recently on specialized rural and commercial assets and the impact of nutrient regulation on land values.

Having spent a good portion of his career in agribusiness and partnering with rural businesses around New Zealand, Ed understands the challenges of the rural sector in changing current economic and political climates, and appreciates our clients need for quality specialist property advice.

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