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Complexity is the new normal


Rural New Zealand is the backbone of the country’s economy, and while that’s a big cross to bear, there’s opportunity through every market cycle.

We can talk about the economy till the cows come home, however, experience shows it's only action that changes the direction of travel.

As spring takes shape throughout the country, it’s timely to remind ourselves of what investing in the rural sector means as new opportunities appear.

An investment made in rural land today is an investment in the long term and future.

Naturally, with that comes shorter-term variability in returns, the weather, and the political landscape, and while it can be hard to see past the immediate challenges, it’s important that everyone involved in the rural economy looks through the cycles.

The real hard yards have been done by landowners in recent years as they’ve knuckled down and repaid debt while interest rates were low, and, in the case of dairy, optimised high payouts to reinvest on-farm, leaving them in a better position to move through another cycle.

Rather than playing the ball directly in front of them, they’ve seen the bigger picture – demonstrating patience and fortitude.

Systemically, I believe rural New Zealand is in a much better position now to face the road ahead.

The debt profile of the sector looks quite different to five years ago and we have a better understanding of where New Zealand sits on the world’s primary industries’ stage.

While regulatory uncertainty remains in the sector, growers and producers are more knowledgeable about how they positively contribute to the global food bowl and where work still needs to be done.

Change really is the only constant these days – and in the rural land sales arena, complexity is our new normal.

When carbon farming was fuelling the hill country market, sheep and beef buyers were increasingly being priced out of opportunities to acquire productive land as those capitalising on the carbon policy settings played the trump card.

Today, legislative changes have swung and balanced the pendulum back, arguably providing pastoral farmers with the opportunity to transact at more productive land values once again.

Quality dairy properties have continued to attract investment and have generally been transacted at productive land values over the past few years.

While the scarcity of licences and development land has previously influenced values in the kiwifruit sector, we have also seen this market balance out again finding a new level normal off its record peak.

Meanwhile, in the lifestyle market, the value of existing lifestyle properties is being preserved given that highly productive land now has greater controls by statute with those layers of protection likely to constrain further subdivision and growth beyond city green belts.

These market shifts require the Bayleys country team to be adaptable to ensure we have the capability and network to continue to deliver the right outcomes for our clients, and as recognition of what we achieve for our clients, we were delighted to receive all six of the awards in the rural category at the 2023 REINZ Awards for Excellence.

Despite some tough market conditions, Bayleys is simply getting on with business because as we celebrate 50 years in real estate this year, we know one thing to be true – the only way out is through.

Although we transact property, we are essentially in the people business and our community connections really matter to us.

That connectivity, providing practical support and celebrating success are more important now than ever, and we are proud of our alliances with Surfing for Farmers, The Rural Support Trust, and the Ballance Farm Environment Awards as each of these community initiatives provide tangible solutions to rural New Zealand.

The Bayleys country team is ingrained in rural New Zealand, viewing the market through a passionate lens and, like our clients, all having a story to tell because rural land is in our DNA.

So if a country property is on your mind, talk to us – providing the best outcomes for our clients is what we’ve been doing for the last 50 years.

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