West Coast Market Update

• Published date: 08 February 2023
• Publication title: West Coast Farming Times, The

Regional Update

The South Island spring rural real estate sales continue to be negatively impacted by rising farm interest rates and the ever-increasing compliance this is impacting buyer purchasing decisions across the country.

Nationally, for the six months to December 2022, rural property sales (20ha+) equalled $1.6 billion, back from $2.3 billion on the same period last year. Nationally the number of farm sales at 495 are back a third on last year too.

December rural sales nationally equalled $548m approx. a third of this season's total sales in a single month, West Coast REINZ reported December rural sales are back at $3.5 million ($6million last year) with the number of sales 2 (3).

While our business has the vantage point of dealing with 1 in 3 rural transactions this season, it does not make us fortune tellers but what we do know is interest rates have a big impact on our rural market. But it does tend to lag, given the seasonality of rural real estate. Over the past year the Reserve bank has lifted the Official Cash Rate (OCR) from it all time low of 0.25% to 4.25% - a level not seen before the GFC, in 2008. The RBNZ is projecting further OCR increases to settle around 5.5% this year. Under any scenario, this is going to put additional downward pressure on our rural real estate market.

However, the opportunity for buyers of primary sector assets in 2023 remains significant, exports for the current season are still tracking ahead of MPI's previous forecasts and are now predicted to hit $55 billion this June, which would be up 15% up on two years ago.

In these times of market change, our advice is, if there is a strategic need for a business exit, then this autumn offers an excellent marketing opportunity. Our experienced, dedicated team are highly trained and knowledgeable and put your needs first. On the West Coast we have an exceptional team that will leave you in no doubt that you have chosen the best to represent you, whatever your real estate needs.

For all rural and lifestyle property advice from a national team of committed salespeople supported by our expert marketing team, call 0800 364 5263 or visit pb.co.nz.

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