Rural property reaches realistic levels after 'euphoric' high

After a "crazy year" between 2007 and 2009, REINZ national councillor and rural spokesperson Peter McDonald says rural real estate prices now mirror those of two years ago. However, there has been a significant drop in the number of properties changing hands.

The median sale price of rural properties in the three months to June this year was $1.15 million, with a Fonterra payout of $4.50. This compares to $1.25 million for the same period in 2007, when the Fonterra payout was around $4.46. In June 2008 the median price reached $1.81 million.

"The Fonterra payout is a pretty good barometer of where we can expect the rural real estate market to be," McDonald says.

Meanwhile, in the three months to June 2009, only 285 farms were bought and sold. This compares to 665 properties two years ago.