The Country 21/11/24: Peter Newbold talks to Jamie Mackay

The GM of PGG Wrightson Real Estate takes his monthly look at the state of the rural market, where there's renewed interest in dairy off the back of a $10 forecast milk price. 

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Episode Transcript

Speaker 1 (00:00):
Monthly here on the country, we catch up with the
GM of PGG Rights in real estate. His name is
Peter Newbold. We have a look at the rural market. Incidentally,
he runs the livestock division for PGG Rights and as well,
so he's a very busy man. Hey, Peter, I noticed
one of the banks has gone to ten dollars with
its milk price. At that money, dairy farmers are making

(00:20):
good money. Are you seeing that being reflected in interest
and demand for dairy farms?

Speaker 2 (00:27):
Yeah, look, one hundred percent. And I think if there's
one issue we've got at the moment, we probably haven't
got enough listings now, but yeah, definitely a lot of interest,
and that's also flowed over to dairy support as well,
So that's one part or one sector that's looking really strong.
And I think the other thing, when the payout gets
out to that sort of number, has a huge impact

(00:48):
not on just property sales, but the wider rural community.
So I just think it's fantastic news, to be honest.

Speaker 1 (00:55):
Absolutely really good news for the primary sector for rural
New Zealand. We're talking today or we've talked today about
improving They're going up all the time. Ke we fruit returns?
Are we going to get back to the helcyon days?
And I don't know if they were if you were
trying to buy a key We fruit farm where people
were paying up to two million dollars per canopy, heck there?

(01:17):
Or is that ship sailed?

Speaker 2 (01:19):
Look, I don't know. It's hard to look ahead. But
one thing is clear is that after a bit of
a drought in that space, we're seeing interest from buyers
a lot more than the previous couple of years, so
that that's real positive. And we're just starting to see
some activity in and around properties come to the market,

(01:40):
which I think is a good indicator that things in
that in that sector are going to be positive. And
of course, you know, the returns and there are pretty
good at the moment, so aren't your question we're going
to see more activity over the next few months in
that queen fruit sector.

Speaker 1 (01:56):
Are sheep and beef properties still proving a bit sticky
to move?

Speaker 2 (02:01):
Yeah, to be honest, they are, and you know, you
put aside the quality ones and then of course you
get serious interest. And again I mentioned that dairy support,
so that's probably had a that's helped. But I think
one of the things. With some of these sheep and
beef properties, I think you sort of almost need to
turn it around. If you were the buyer, where would

(02:22):
you pitch a price? And I think that's probably one
of those challenges that some of the vendors are just
not thinking clearly that you know, you go and sell
something nets personally comes in, there's got to be a
return in that space. And the capital game story has gone,
so I think there's a little bit of I guess
adjustments still to take place there in a number of

(02:43):
these listings.

Speaker 1 (02:44):
There's a really interesting dynamic happening in New Zealand at
the moment. The government is wanting to double exports from
the primary sector in the next decade. It can't do
it without dairy doing the heavy lifting. And I think
it was Cameron Bagri who initially floated the idea of
another round of dairy conversions. Now I'm not sure how

(03:06):
this would happen environmentally to start with, but if it did, Peter,
that would kick life into the rural market big time.

Speaker 2 (03:16):
I think there'd be a few sheet and beef boys
running to list their properties. I don't know if that
will really take place. When you look at all the
environmental pieces that are out there that you know, we're
all New Zealand has to deal with. But sure, you know,
it's the stability and the price where it sits at
the moment, maintains itself, then there will be potentially the

(03:37):
odd conversion, but I don't think it's going to come
big numbers.

Speaker 1 (03:40):
What's the best time of the year to sell your farm?
Is it spring or autumn? I always think that farms
look their absolute best in the autumn season, providing you
haven't come through a summer drought.

Speaker 2 (03:50):
Of course. Yeah, and I think there's a strong argument
that autumn sometimes produces I guess, more listings, more sales, etc.
But I think it comes down to a regional play there.
And if I think of the North Island, for example,
you take somewhere like you know, Upper North Island, a
lot of properties come to the market in the autumn.
But you're dead right interesting Now we've got a number

(04:13):
of I guess individuals of thinking I should sell them
with property. It's too late now in the spring, so
I was seeing quite a bit of interest if I
look look ahead into the autumn, and I think those
properties will come to the market early. If I look
ahead now and what's happening. So yeah, look it's a
positive time to sell your property.

Speaker 1 (04:33):
And get on your Peter Newbold and just before I
bid you farewell, put on your live stock had I
just want to give you your team. Your stock agents
out there are a big pat on the back. I
think it was Andrew Gibson we spoke to last week.
These guys are out and about doing the hard yards
for the IHC CARF and Rural scheme. It's a wonderful
association between the IC and PGG rights and long standing.

(04:55):
Keep up the great work. We really appreciate what you do.

Speaker 2 (04:58):
Yeah, thanks, Jamie. Look just covering on on that. You know,
the guys really get him behind it and support it
and we've been doing it for a long time and
I just think it's a wonderful thing we're involved in.
So long may it continue.

Speaker 1 (05:11):
Good on you. We'll catch you next month's final rent
for twenty twenty four.

Speaker 2 (05:15):
Cheers Jamie, have a good afternoon.