National Bank Rural Report - September

Where Are We Going?

The increase in the value of New Zealand farm land has outstripped growth in the farm income generated by the land. Several reasons can be given for the trend. Typically commentators look at rural assets being over or undervalued. Such terms are notoriously hard to define. Less is written about the implications of the change in land values. We provide some background data by looking at the trends in the farm business result and the underlying drivers. We conclude it is the ‘market’ in operation, but ask is it sustainable?

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