Farm Property Values on the Rise Across Australia in Early Spring
Paraway Pastoral’s Pier Pier Station will be a key test for the spring selling season. Supplied
The traditional spring selling season for farming property across Australia is likely to record some strong results with early sales indicating increases in value as low interest rates help drive demand.
Southwell Land and Water’s Rob Southwell has been closely watching the market and expects this spring to provide some pricing momentum.
“Recent sales of rural property has seen a major shift upwards in price,” Mr Southwell said. “It doesn’t seem to matter what classification of country or enterprise type.”
The July sale of a high quality broad acre farming property, Noelurma north of Narrabri, for a price of $6331 per hectare, representing an increase of $900 per hectare on recent sales of similar country, was one example, while further west in lower rainfall grazing country on the Macquarie River, rural property that sold for about $556 per hectare in 2010 was selling for $900 per hectare, he said.
The key test in the Macquarie Valley this spring will be Paraway Pastoral’s 31,600 hectare mixed farming property Pier Pier, which could fetch as much as $30 million.
Paraway, operated by Macquarie Group, appointed CBRE Agribusiness director Colin Medway to sell the property.
Mr. Medway is fresh from a record rural sale in the Southern Tablelands near Yass called “Billabong”. It sold 27 per cent above its reserve for $5.8 million. The genuine high quality mixed farm of about 900 hectares achieved $6424 per hectare, pointing to an increase of around $1482 per hectare on anything achieved in the area.
“The buyers out there are all existing industry players whose balance sheets have repaired after drought, their profitability has improved with stronger commodity prices, their banks are friendly and cash is cheap,” Mr. Medway said.
$3.5 million sale
Late last month, quality black soil cattle fattening country at Blackville on the southern reaches of The Liverpool Plains saw a property called Rothsay sold under the hammer for just short of $3.5 million or $3700 per hectare – an increase of $1040 per hectare since it was purchased in 2013.
Colliers International’s director of rural and agribusiness valuation Shaun Hendy said both volume and values were up.
He said some of the properties Colliers are doing valuations on for buyers in due diligence had been marketed for quite some time with firm vendor expectations.
“The market appears to have accepted these expectations, which is considered to be a combination of improved commodity values, low interest rates and improved seasonal conditions,” Mr. Hendy said.
“In some sectors a lack of sales prior to 2016 made the valuation process difficult and with sales now evident, we are extremely happy that valuation opinions have been supported.”
While the spring is not a traditional selling time for the Top End, Herron Todd White valuer Frank Peacocke expects the sales activity to remain strong.
“There have been some record lump sums paid in 2016, including around $110 million in QIC’s 80 per cent acquisition of NAPCO’s Alexandria and Mittiebah aggregation, around $49 million by Asian investors for a 50 per cent stake in the Tipperary Group, $40 million by Asian investors in the SAWA aggregation in the Kimberley (Moola Bulla, Beefwood Park and Shamrock).”
“These sales show that pastoral land values have all strengthened during 2016 but at varying rates depending on the region.”
In Western Australia, Herron Todd White’s David Abel also said improved conditions and some good sales gave a positive outlook for the spring.
“This year seems to be trying to better last, with widespread record rainfall providing the best start many have had in living history,” Mr. Abel said.
SOURCE: Australian Financial Review
POSTED: September 11, 2016
AUTHOR: Matthew Cranston
@Luxury Estates – experts on visionary marketing of Australia’s most luxurious real estate for sale
