Rural property: Low interest rates, undersupplied market lifts prices

Experts have revealed how land prices will perform during the rural property market’s autumn selling season – and where the buyers will be coming from.

The main drivers of the rural property market in Victoria’s southwest are commodity prices, historically low interest rates and outstanding seasonal conditions. Picture: Dannika Bonser / File

THE upcoming autumn property market is expected to be just as hot as the highs of last year.

Real estate agents and analysts say low interest rates, tip-top seasonal conditions and an undersupplied market are the key drivers.

CBRE’s Shane McIntyre said international interest from a wide variety of platforms would continue.

“Recent events regarding our export volumes have hastened the courting process with alternative trading partners,” Mr McIntyre said.

“The Reserve Bank has forecast only modest movement in interest rates, if at all, until 2024-25.

“Combine this fact with favourable seasonal conditions and the willingness to borrow becomes heightened throughout the sector, resulting in land values continuing to improve, particularly in the short term. Medium term, the improvement may not be as spectacular, but it will occur”.

Charles Stewart’s Nick Adamson said the main drivers of the rural property market in Victoria’s southwest were commodity prices, historically low interest rates, and outstanding seasonal conditions.

“While these main drivers remain constant, bullish rural property prices will prevail,” Mr Adamson said.

“The limiting factor may be supplies of properties on the market and this will create further competition.

“Lifestyle property values are also very strong, and these are underpinned by buyers wanting to decentralise and live in the country, which is a direct result of the COVID-19 pandemic and other influences”.

Rabobank analyst Wes Lefroy said the golden run of land price growth would continue for at least the next 12 months.

“On a regional basis, we expect that the number of properties on the market will be the most influential factor on medium price growth in 2021,” Mr Leyfroy said.

“Our expectations for land price growth in 2021 have increased in recent months for two major reasons. Firstly, few market analysts anticipated the size of the Australian winter crop … this will deliver a timely boost in operating profits, which will ensure farmers have the purchasing power to expand out.

“Secondly, the COVID-19 crisis has had a much smaller impact on farm revenues and confidence than we originally expected”.

MORE

EVERY MAJOR AUSTRALIAN FARM SALE IN 2020

WIND FARM DEVELOPER ON THE MARKET