Farmers hit by fall in land value

Press, 26 May 1984, Page 6

Farmers hit by fall in land value

PA Dunedin Less efficient farmers will be seriously hit by a continuing fall in the value of rural land, says a director of the Challenge Corporation, Mr lan Donald. There had been a 20 to 40 per cent reduction in sheep and cattle farm values since 1981, depending on the quality of the land, he told Otago Federated Farmers. “First class land is levelling out, but second and third class land is still falling and may well fall further 25 to 30 per cent," he said. “This is not as bad as it might sound for a long-established farmer, because before the peak being achieved, land prices had risen up to 100 per cent in the previous three years. “It is serious, however, for the farmer who has recently acquired land at a high price, for his equity will be seriously eroded. A further 30 per cent reduction for someone with a 50, 50 debt equity ratio will halve his equity. For the inefficient farmer the outlook is bleak. “Unless he is on very good land he may well be best to sell now before land prices fall further,” said Mr Donald.