Rural property market to continue to thrive with high demand for land
The 2021 property sales season has started strong, and is only expected to grow. Here’s why.
THE rural property market’s golden run is expected to continue this year, with low interest rates, tip-top seasonal conditions and an undersupplied market the key drivers.
The recent sale of a 340-hectare grazing property in southwest Victoria has already shown this playing out, with the farm selling for nearly $6 million – or $17,529 a hectare.
Brian O’Halloran and Co selling agent Neil Hammond says the price was “way past expectations” due to the undersupplied market and high demand. The Terang property, Gwinganna, was purchased by a buyer from out of the district and will continue to be run as a beef enterprise.
The sale followed two brothers pocketing more than $80 million after their farm at Nar Nar Goon, east of Melbourne, was purchased by a developer in January. About 1100 homes are expected to be built on the 83-hectare property.
Land price growth was already expected to be significant in 2021 but Rabobank analyst Wes Lefroy says expectations have further increased in recent months. “Firstly, few market analysts anticipated the size of the Australian winter crop, which has led ABARES to increase their gross farm revenue forecast to $65.1 billion for the 2020-21 financial year, up from $61.2 billion previously,” Lefroy says.
“This is an increase of 6.9 per cent year-on-year and 5.6 per cent above the previous record in 2016-17. This will deliver a timely boost in operating profits, which will ensure farmers have the purchasing power to expand and, on the supply side, will support farmers to service existing debts.”
REGIONAL PROPERTIES SNAPPED UP IN SURGE
WIMMERA FARM SELLS FOR MORE THAN $19K A HA
Lefroy says land prices are also expected to increase due to the coronavirus pandemic having a smaller impact on farm revenues and confidence than initially expected.
He says while in the short term foreign purchases have been more logistically difficult than usual, due to border restrictions and a tighter approval processes, it is expected foreign buying activity would increase in the medium term.
“We expect the number of properties on the market will be the most influential factor on price growth,” he says.
“Historically high prices, along with a big improvement in seasonal conditions, can actually have two opposite impacts on supply. In the first instance, it may prompt some vendors into the market who are looking to make the most of favourable conditions. In contrast, favourable conditions will also enable some would-be sellers, who may have been planning to sell due to financial or lifestyle reasons, to continue farming.”
AUSSIE AQUACULTURE IS SCALING UP
NFF SEES OPPORTUNITY IN TIK TOK
BARRY IRVIN, THE ULTIMATE MILKMAN
RECENT MAJOR FARM SALES
SOLD
Beef farm, Nar Nar Goon, Vic
$80 million
Culbara, Woomargama, NSW
$19.7 million
Nambrok Estate, VIC
Price not disclosed but was being quoted at about
$12 million
Arthurs, Culcairn, NSW
$9.55 million
Dunollie Park, Tooma, NSW
$8.9 million
Gwinganna, Terang, Vic
$5.96 million
Murray River Organics vineyard, Merbein West, Vic
$5.5 million
FOR SALE
Mount Morriston,
Ross, Tasmania
$22-$24 million
Field House,
Mount Macedon, Vic
$4.85-$5.25 million
Iowa, Henty, NSW
$3.8 million-plus
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