Lifestyle properties and farm sales are expected to pick up and gain momentum in 2024, according to PGG Wrightson Real Estate.

Excellent spring weather meant farmers were looking at a productive season, but increased production costs and interest rates along with reduced commodity prices meant most farmers were too squeezed to look at buying more property, the company said.

According to Real Estate Institute statistics, the number of rural properties sold across New Zealand in 2023 was lower than in 2022.

PGG Wrightson expected the improving returns for dairy farmers will hold the key for a broader recovery.

Local rural and lifestyle property sales consultant Jeff Donaldson said sales would pick up as the new government beds in and farmers gained confidence.

He expects Mid Canterbury lifestyle property and smaller farm sales to pick up from February or March, but sales for larger farms could take until September to gain momentum.

PGG Wrightson said demand was returning for dairy properties under $8 million with low-cost irrigation. There were sales in the pipeline in Mid- and South Canterbury.

"Although values have reduced, vendors are ready to accept where the market now sits," the agency said in a statement.

PGG Wrightson expects buyer confidence to return in a few months and for the rural property market should start to gather momentum as long as financial institutions remain flexible with their lending criteria.

Sheep and beef farm sales were generally in hiatus around the country, but it only takes one or two sales to spark momentum. The agency expects improving farmgate milk prices to be a catalyst for sales, possibly also flowing through to the sheep and beef sector.

By Sharon Davis