RTTNews - Monday, a report from the Real Estate Institute of New Zealand showed that there was a significant drop in the number of rural properties sold in the three months ended June. However, the rural farm prices were consistent with those seen in the same period two years ago.

A total of 285 farms were bought and sold in the three months ended June, consistent with what is seen in the three months ended May, but much lower than the 711 farms bought and sold in same period last year.

At the same time, the report said the prices mirrored those seen in the three months ended June of 2007.

Peter McDonald, REINZ National Councillor and rural spokesperson said the latest statistics released clearly showed that the market has settled back to realism, after a crazy year in between 2007 and 2009.

We've known for many months the market couldn't sustain the euphoria created by the massive Fonterra payout of 2008 and prices have realistically settled back around 2007 figures, McDonald said.

McDonald pointed out that the Fonterra payout was a good barometer of where the rural market could be expected to be. In June, when the median sale price of farms was NZ$1.15 million, the Fonterra payout was NZ$4.50. In June last year, while the median sale price of farms was NZ$1.25 million, the Fonterra payout was NZ$4.46.

Meanwhile, for lifestyle rural properties, the three months period to June showed a good jump on the volume of properties changing hands over the corresponding period last year, climbing to 1,354 from 1,177, REINZ said.

Lifestyle property performance tends to correlate more closely with residential trends. Unlike farm prices, lifestyle prices didn't peak dramatically during 2008, but neither have they fallen significantly despite the general economic conditions, McDonald pointed out.

Lifestyle properties sold for a median price of NZ$421,250 in the three months ended June compared with NZ$428,000 for the three months to May and NZ$455,000 for the three months to June last year, the report added.

For comments and feedback: contact editorial@rttnews.com