Farm sales have hit an all time new low, according to statistics from the Real Estate Institute of New Zealand.

The Real Estate Institutes spokesman Peter McDonald says that the March Stats showed the weakest number of farm sales seen in more than 15 years.

Peter McDonald says there are several factors that could cause this drop.

“I think we have come through a period of uncertainty. There are many who have been carrying a lot of big debts through the last year or two, who have been given a bit of a reminder as to what could happen if they don’t start getting themselves into a better position.

“I think a lot of farmers are choosing to retire debt and consolidate and strengthen their own positions in preference to actually expanding and growing their business in the short term.”

190 farms were sold in the three months ending March 2011 compared to 210 in the same period last year, says the Real Estate Institute.

This is continuing the trend of falling farm sales seen across New Zealand over the past three years.

For the year ended March 2011, 869 farms were sold compared to 2,692 for the year ended March 2008 – a drop of almost 68 percent.

Peter McDonald says that while this is frustrating for the rural estate industry, there are certainly signs of confidence in the rural sector, with rising payouts and a strong improvement in sheep and beef farm profitability.

However this is not yet being translated in property activity and he believes this will soon rectify itself.

“Once the higher profits have flowed through, and once people have been able to strengthen their positions and so forth, they will start looking for opportunities to grow their businesses again. That is when I think we will start seeing a turnover of farms.“