Property report: The future of farm ownership

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Jamie Mackay from The Country recently caught up with Peter Newbold, GM of PGG Wrightson Real Estate for their monthly check on the pulse of the rural real estate market.

First on the agenda is forestry conversions of sheep and beef properties.

Mackay wanted to know if the market was slowing down.

Newbold confirmed activity had slowed and was becoming a more local phenomenon with a bit of pressure on values, however, he said this was probably a good thing in the long term.

As for dairy, Newbold pointed out the market had been fairly static, affected by high running costs and interest rates.

Horticulture has been the star for the last few years but kiwifruit has had a very challenging two or three seasons.

Newbold reckoned kiwifruit had had a good run and it was time for a period of readjustment.

However, he said the consensus seemed to be they’ll come back again.

Horticulture in the Hawke’s Bay region has been slow but there’s been quite a lot of activity among sheep and beef properties.

Mackay raised anecdotal evidence he’d heard about a lot of farmers exiting the industry and retiring. He said the question had to be who will buy these farms.

Newbold agreed that there would be a significant change in farm ownership over the next few years but there would still be a market; as rural areas remained a great place to live and work.

A lot of good properties that have been held in the same family for generations will come to market.

At the moment there’s not a lot of corporate activity in that space. Mainly neighbours and regional buyers, or a few buyers outside the traditional rural space investing in farms.

Newbold confirmed there was still good interest in lifestyle properties with values at a point where people are comfortable.

The change in working habits post-Covid and the improved facilities available in regional and provincial New Zealand were all factors.

More and more people will be choosing the lifestyle property option, he said.