Rain the biggest factor to influence rural property market

RAIN in the next two months will be the biggest factor to influence the rural property market this year.

Strong interest: Rosewood Station at Wilcannia sold at auction in November for $4.525 million

RAIN in the next two months will be the biggest factor to influence the rural property market this year.

Tim Lane, national rural director at Herron Todd White, said while good widespread rain in coming months would see the market remain “quite positive”, ongoing dry conditions could result in a levelling out of the market.

“A return to sound seasonal conditions would support and possibly see some increased market activity on the buy side; no rain two years in a row in NSW and Victorian regions currently doing it tough could cause other financial pressures which may bring supply of property to the market,” Mr Lane wrote in Herron Todd White’s first monthly report for the year.

In Western Victoria and South East South Australia HTW valuer Angus Shaw said there was likely to be slower demand for rural property this year with many “A-grade” farms changing hands last year.

These included Cavendish grazing aggregation Mokanger and Lewana which sold for $15 million to wool top-maker, Tianyu Wool, and Mount Fyans, which was bought by Riverina sheep farmers Ian and Camilla Shippen for $37 million.

Other big sales included Woolbrook at Teesdale, Fernleigh at Glenthompson and Cairn Curran at Baringhup.

“Whilst supply should remain relatively tight, reduced demand is expected to slightly soften competition and values towards the later part of 2019,” Mr Shaw wrote in the report.

“Values in the deep southern dairy belt are envisaged to improve slightly from a low base and the remainder of the cropping and grazing market is likely to experience static growth.

“Movements in interest rates and commodity prices remain the most critical impacting factors for the year ahead despite the drier-than-average season in many parts.”

Mildura HTW valuer Graeme Whyte said the sale of a number of rural properties in western NSW and outback South Australia at the end of last year highlighted that demand for rural and pastoral holdings “had not waned”.

Broken Hill grazing property Netley Station sold for $10.6 million in December.

The 73,628ha holding was bought by Swiss Australia Farm Holdings, which also own Neumayer Valley Station in Queensland and South Australian holdings Glenstrae and Naweena.

Netley Station was previously owned by Gary Radford who purchased it in 1987.

Meanwhile, Rosewood Station at Wilcannia sold at auction in November for $4.525 million.

Selling agent Marty Deacon, from Elders, said the sale of the 27,348ha grazing property equated just over $66 an acre, which was a new district record.

“[There was] huge interest even though it was very dry,” Mr Deacon said.

Mr Whyte said solid demand was expected to continue for grazing and cropping land, with a limited number of properties expected to be offered for sale.

“Commodity prices are forecast to remain strong, however many producers require at least average rainfall to enjoy the benefit,” he said.

“Agents report that rural property, even during the current dry conditions, continues to generate strong interest from a variety of investors including Australian families, institutions and existing pastoralists, and this demand is expected to continue throughout 2019.”