{"id":892,"date":"2018-10-28T11:46:00","date_gmt":"2018-10-28T11:46:00","guid":{"rendered":"http:\/\/propertyandlivestock.com.au\/?p=892"},"modified":"2020-05-11T17:10:45","modified_gmt":"2020-05-11T17:10:45","slug":"fundamentals-underpinning-rural-property-values-in-australia-remain-rock-solid","status":"publish","type":"post","link":"https:\/\/propertyandlivestock.com.au\/en_au\/fundamentals-underpinning-rural-property-values-in-australia-remain-rock-solid\/","title":{"rendered":"Fundamentals Underpinning Rural Property Values In Australia Remain \u201cRock Solid"},"content":{"rendered":"\n<p>DEMAND for quality agricultural land continues to outstrip availability, driving an upwards trend on prices across Australia, according to a recent Rabobank report. The financial institution\u2019s inaugural Australian Land Price Outlook, titled&nbsp;<em>No Summit in Sight \u2014 Ag Land Prices to Climb Higher,&nbsp;<\/em>was released at the end of August.<\/p>\n\n\n\n<p>The report\u2019s author, Rabobank agricultural analyst Wes Lefroy said agricultural land prices were set to continue to climb over the next two years, although the overall rate of price growth was predicted to slow \u2014 impacted by weakening economic \u2018tailwinds\u2019 and current adverse seasonal conditions in some parts of Australia. \u201cWhile agricultural land prices are influenced by macro-economic factors, Australian land markets are highly regionalised,\u201d he said<\/p>\n\n\n\n<p>The common factor has been that, across most agricultural regions, demand for quality land continues to outstrip market availability. \u201cThis is the driving force behind land prices continuing to move higher and we consider this demand\/ availability imbalance to be the overarching driver as to why land prices will continue to increase over the next two years, albeit at a lower level of growth with a decrease of support from macro-economic fundamentals,\u201d Mr Lefroy said.<\/p>\n\n\n\n<p>By the end of 2017, the report found, the median price for agricultural land in Australia had risen to A$2278 per hectare, at a compound annual growth rate (CAGR) of 2.5 per cent over 10 years. Strongest growth had been shown in Tasmania, Victoria and Western Australia respectively. Much of the growth in prices paid for farming land had been driven by rises in farmers\u2019 operating profits, Mr Lefroy said, supported by positive macro-economic conditions for the agricultural sector.<\/p>\n\n\n\n<p>\u201cNationally, the five-year (2013-17) average reported farm operating profit in 2017 was just under seven times larger than a decade earlier (for 2003-07),\u201d he said. \u201cAnd this growth has primarily come from broadacre cropping and mixed livestock farms.\u201d A further factor contributing to price growth had been market interest from corporate buyers. \u201cCorporate interest in ag land has also increased, adding competition for farmland purchases,\u201d he said.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"649\" height=\"487\" src=\"http:\/\/propertyandlivestock.com.au\/wp-content\/uploads\/2020\/05\/1c54c4ff7e41f479cee7ba96e4c91bda.jpg\" alt=\"\"  srcset=\"https:\/\/propertyandlivestock.com.au\/wp-content\/uploads\/2020\/05\/1c54c4ff7e41f479cee7ba96e4c91bda.jpg 649w, https:\/\/propertyandlivestock.com.au\/wp-content\/uploads\/2020\/05\/1c54c4ff7e41f479cee7ba96e4c91bda-300x225.jpg 300w\" sizes=\"(max-width: 649px) 100vw, 649px\" class=\"wp-image-893 no-lazyload\" \/><\/figure>\n\n\n\n<p>Australian Land Price Outlook report 2018: New South Wales average land price. Picture: Rabobank<\/p>\n\n\n\n<p>QUEENSLAND and New South Wales continue to demonstrate market influences driven by drought and dry conditions. In NSW, all agricultural areas showed land price increases across the period from 2015-17, however, the report saw that this growth would soften, with the current dry impacting operating costs. This would slow demand for land purchases. However, high cropping and beef profits, and \u201cintense competition for tightly held land will continue to push prices higher\u201d. In Queensland, beef prices have continued to support land prices, as has strong interest in quality arable land.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"649\" height=\"487\" src=\"http:\/\/propertyandlivestock.com.au\/wp-content\/uploads\/2020\/05\/70987bd23c2d1ad2b047f5f951682004.jpg\" alt=\"\"  srcset=\"https:\/\/propertyandlivestock.com.au\/wp-content\/uploads\/2020\/05\/70987bd23c2d1ad2b047f5f951682004.jpg 649w, https:\/\/propertyandlivestock.com.au\/wp-content\/uploads\/2020\/05\/70987bd23c2d1ad2b047f5f951682004-300x225.jpg 300w\" sizes=\"(max-width: 649px) 100vw, 649px\" class=\"wp-image-894 no-lazyload\" \/><\/figure>\n\n\n\n<p>Australian Land Price Outlook report 2018: Queensland average land price. Picture: Rabobank<\/p>\n\n\n\n<p><em>Rural Weekly&nbsp;<\/em>spoke with several rural property specialists across the state to gauge a sense of regional markets. James Croft is principal\/ director of Ray White Rural, Pittsworth, on the Darling Downs. Mr Croft said the drought was not having a large impact on land prices, with rural producers largely able to absorb the costs of a poor winter crop. \u201cAs time goes on, and if there\u2019s no summer crop and a low supply of water, that\u2019s where you could see confidence do a downward trend,\u201d Mr Croft said. Several recent sales in the region have reflected a continued interest in quality irrigation and dryland properties. \u201cOur prime Darling Downs farming country hasn\u2019t gone down in value. We\u2019ve done some record deals in the last three to six months,\u201d he said.<\/p>\n\n\n\n<p>He cited one recent sale of a blue-chip irrigation property that had fetched $9000 per acre, and a dryland operation that had come in at $4300\/acre. Mr Croft said prices in his region were being maintained by competition for quality land and high commodity prices, with the primary property investment being driven by family-based agribusinesses.<\/p>\n\n\n\n<p>He said corporate interest in land still influenced price growth, although there had been a tapering of interest over the past six months, while interest from Chinese agricultural companies had tapered in the past 12\u201418 months. This perception was also the experience of Darryl Langton, rural property specialist with Landmark Harcourts Roma, servicing the Maranoa, Warrego and Western Downs regions. He said that, particularly in the eastern parts of his region, a below average winter was offset by good rainfall over the preceding summer. Good pasture and water reserves were making the region attractive to buyers out of northern and central NSW and western Queensland.<\/p>\n\n\n\n<p>\u201cIt\u2019s added buyers into our marketing campaigns from areas where we normally receive some inquiry, but it\u2019s certainly increased the volume of inquiry,\u201d Mr Langton said. \u201cOur market has been in a strong upwards cycle here since 2014, and the market continues to gather momentum.\u201d Small through to large family-based agribusiness looking to aggregate with neighbouring properties also continued to be strong players in the regional agricultural property market.<\/p>\n\n\n\n<p>A minor element in the local market had been some investment in mulga land by players in the carbon market. The Wide Bay Burnett was shown in the Rabobank report to be indicating a strong upwards trend. Baden Lowrie, rural properties specialist with Elders Rural Bundaberg said a strong driver of growth in the Bundaberg agricultural property market had been around the development of macadamia as a significantly growing horticultural sector in the region. \u201cThe key focus in the last 18 months to two years has been suitable larger parcels of land for macadamia development,\u201d Mr Lowrie said. \u201cWith the lower sugar prices, there\u2019s not too many parties interested in sugar cane properties for sugar cane production, but they are looking at suitable soil types, and larger scale areas with irrigation supply for macadamias.\u201d He estimated that 90 per cent of sugar cane farms recently sold have been transitioned to macadamia production. Investment in this sector was coming from both family and corporate agribusinesses. Mr Lowrie works across an area extending north to Biloela and west to Eidsvold, and saw a similar pattern to other rural property specialists in terms of investment in grazing properties, with competition strong for quality pasture land with water, as people looked to create additional or regionally diverse grazing options.<\/p>\n\n\n\n<p>RABOBANK report author Wes Lefroy said nationally, growth in land prices would likely weaken. \u201cLooking forward, we do expect the tailwinds from macro-economic fundamentals that have supported the growth of land prices to weaken,\u201d Mr Lefroy said. \u201cThe cost of funding for banks is expected to rise so this would decrease the relative borrowing capacity for farmers. \u201cIn addition, a fall in production across some major agricultural commodities, following a number of high-production years, will impact operating profits, particularly with the current dry conditions in eastern Australia.\u201d<\/p>\n\n\n","protected":false},"excerpt":{"rendered":"<p>DEMAND for quality agricultural land continues to outstrip availability, driving an upwards trend on prices across Australia, according to a recent Rabobank report. The financial institution\u2019s inaugural Australian Land Price Outlook, titled&nbsp;No Summit in Sight \u2014 Ag Land Prices to Climb Higher,&nbsp;was released at the end of August. The report\u2019s author, Rabobank agricultural analyst Wes&hellip;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","two_page_speed":[],"footnotes":""},"categories":[1],"tags":[],"class_list":["post-892","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Fundamentals Underpinning Rural Property Values In Australia Remain \u201cRock Solid - David Carter Property and Livestock<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/propertyandlivestock.com.au\/en_au\/fundamentals-underpinning-rural-property-values-in-australia-remain-rock-solid\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fundamentals Underpinning Rural Property Values In Australia Remain \u201cRock Solid - David Carter Property and Livestock\" \/>\n<meta property=\"og:description\" content=\"DEMAND for quality agricultural land continues to outstrip availability, driving an upwards trend on prices across Australia, according to a recent Rabobank report. 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This is driven in the most part, the report says, by projected continuing high demand for ag properties, which in most\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1013,"url":"https:\/\/propertyandlivestock.com.au\/en_au\/australian-agricultural-commodities-outlook-2018-snapshot\/","url_meta":{"origin":892,"position":1},"title":"Australian Agricultural Commodities Outlook 2018 Snapshot.","author":"David Carter Property and Livestock","date":"July 8, 2018","format":false,"excerpt":"Australian Agricultural Commodities Outlook 2018 Snapshot. (Source: Rabobank Agribusiness Outlook 2018) Wheat\u00a0- prices\u00a0will\u00a0continue\u00a0to\u00a0be\u00a0weighed\u00a0down\u00a0in\u00a02018,\u00a0following\u00a0another\u00a0record\u00a0year\u00a0of\u00a0global\u00a0wheat\u00a0production\u00a0in\u00a02017, and with\u00a0forecast\u00a0global\u00a02017\/18\u00a0ending\u00a0stocks\u00a0set\u00a0to\u00a0reach\u00a0a\u00a0new\u00a0record\u00a0of\u00a0273\u00a0million\u00a0tonnes.\u00a0Prospects\u00a0for\u00a0market\u00a0strengthening have\u00a0however\u00a0emerged,\u00a0with\u00a0Rabobank\u00a0forecasting\u00a0a\u00a0limited\u00a0price\u00a0appreciation\u00a0in\u00a0the\u00a0global\u00a0benchmark\u00a0over\u00a0the\u00a0coming\u00a0year. Barley\u00a0\u2013\u00a0forecasts\u00a0for\u00a0the\u00a0lowest\u00a0global\u00a0ending\u00a0stocks\u00a0in\u00a0more\u00a0than\u00a030\u00a0years\u00a0and ongoing\u00a0strength\u00a0in\u00a0Australian\u00a0livestock markets\u00a0are\u00a0set\u00a0to\u00a0keep\u00a0barley\u00a0prices\u00a0elevated. Dairy\u00a0\u2013 the\u00a0road\u00a0to\u00a0recovery\u00a0resumes,\u00a0the\u00a0Rabobank\u00a0report\u00a0says,\u00a0with\u00a0trading\u00a0conditions\u00a0for\u00a0dairy\u00a0farmers\u00a0to\u00a0be\u00a0broadly attractive,\u00a0and\u00a0processor ownership\u00a0issues\u00a0resolving.\u00a0Growth\u00a0in\u00a0the\u00a0global\u00a0exportable\u00a0dairy\u00a0surpluses\u00a0will\u00a0however\u00a0continue\u00a0to\u00a0expand\u00a0in\u00a0the\u00a0first\u00a0quarter\u00a0of\u00a0the\u00a0year,\u00a0putting\u00a0ongoing pressure\u00a0on\u00a0global\u00a0prices. However,\u00a0the\u00a0bank\u00a0isn\u2019t expecting\u00a0these\u00a0surpluses\u00a0to\u00a0overwhelm\u00a0the\u00a0global\u00a0market.\u00a0China\u2019s\u00a0import appetite\u00a0for\u00a0dairy\u00a0is\u00a0also\u00a0forecast to\u00a0remain\u00a0buoyant\u00a0during\u00a0the\u00a0year. Beef\u00a0\u2013\u00a0growing\u00a0global\u00a0beef\u00a0(as\u00a0well\u00a0as\u00a0poultry\u00a0and\u00a0pork)\u00a0production, together\u00a0with\u00a0increased\u00a0cattle\u00a0inventory\u00a0in\u00a0Australia,\u00a0will exert\u00a0downward\u00a0pressure\u00a0on\u00a0Australian\u00a0cattle\u00a0prices\u00a0through\u00a02018. Sheepmeat \u2013\u00a0Strong export markets and limited growth in global lamb production are expected to continue to drive good prices\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":903,"url":"https:\/\/propertyandlivestock.com.au\/en_au\/farmland-demand-up-despite-drought-pressure-on-ag-investment-earnings\/","url_meta":{"origin":892,"position":2},"title":"Farmland Demand Up Despite Drought Pressure On Ag Investment Earnings","author":"David Carter Property and Livestock","date":"October 21, 2018","format":false,"excerpt":"Bullish farmland demand continues to defy the drought\u2019s impact on primary producer incomes, with the value in owning permanent horticulture farms really starting\u00a0to shine as the big dry threatens to get drier this summer. Permanent cropping income returns assessed by the Australian Farmland Index\u2019s monitor of leading farm investor earnings\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":876,"url":"https:\/\/propertyandlivestock.com.au\/en_au\/annual-world-indicator-prices-of-selected-agricultural-commodities-sept-2018\/","url_meta":{"origin":892,"position":3},"title":"Annual World Indicator Prices Of Selected Agricultural Commodities Sept 2018","author":"David Carter Property and Livestock","date":"November 30, 2018","format":false,"excerpt":"Annual world indicator prices of selected commodities","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":883,"url":"https:\/\/propertyandlivestock.com.au\/en_au\/what-is-fair-market-value-for-rural-land-sales-in-australia\/","url_meta":{"origin":892,"position":4},"title":"What Is Fair Market Value for Rural Land Sales In Australia?","author":"David Carter Property and Livestock","date":"November 15, 2018","format":false,"excerpt":"Fair market property value is a rational and unbiased estimate of the potential market price of an rural land asset. The market value of a property is the price that would be negotiated between a willing buyer and willing seller in an arm\u2019s length transaction after proper marketing wherein the\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":929,"url":"https:\/\/propertyandlivestock.com.au\/en_au\/positive-outlook-for-australian-rural-property-market\/","url_meta":{"origin":892,"position":5},"title":"Positive Outlook for Australian Rural Property Market","author":"David Carter Property and Livestock","date":"September 3, 2018","format":false,"excerpt":"The rural market has had a strong 2018 period, built off the tail winds of continued downward pressure on the softening Australian dollar from the January high combined with a dominant agricultural industry within Australia that has strengthened further in the 2017\/18 period.\u00a0However with all that is going on there\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/propertyandlivestock.com.au\/en_au\/wp-json\/wp\/v2\/posts\/892"}],"collection":[{"href":"https:\/\/propertyandlivestock.com.au\/en_au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/propertyandlivestock.com.au\/en_au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/propertyandlivestock.com.au\/en_au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/propertyandlivestock.com.au\/en_au\/wp-json\/wp\/v2\/comments?post=892"}],"version-history":[{"count":0,"href":"https:\/\/propertyandlivestock.com.au\/en_au\/wp-json\/wp\/v2\/posts\/892\/revisions"}],"wp:attachment":[{"href":"https:\/\/propertyandlivestock.com.au\/en_au\/wp-json\/wp\/v2\/media?parent=892"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/propertyandlivestock.com.au\/en_au\/wp-json\/wp\/v2\/categories?post=892"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/propertyandlivestock.com.au\/en_au\/wp-json\/wp\/v2\/tags?post=892"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}