Farm prices settle down after dairy boom, data shows

The latest farm sales figures are good news, says the Real Estate Institute, despite Reserve Bank warnings of a price bubble.

A total of 266 farms were sold in the three months to April, up from 231 in March but down from 786 on the same time last year. The median price was $1 million, down from $1.2 million in March and $1.8 million in April last year.

The Reserve Bank's Financial Stability Report for May said agricultural debt levels had risen sharply and might not be sustainable, with loans to the sector accounting for 15 per cent of all bank lending.

Fluctuation in rural incomes was a risk to borrowers and lenders, and had become more pronounced as lower commodity prices and world economic weakness reduced export receipts, the report said.

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Posted: 19 May 2009

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