RURAL properties are spending more time on the market, with conditions dropping off from recent highs, leaving market participants more hesitant.
According to the latest Herron Todd White Month in Review, the rural market has become much tighter, as listings are being passed in at auction after spending more days for sale.
In Central West NSW and Western NSW, interest rate hikes, less than ideal seasonal conditions and low livestock prices have led to a significant shift in the market.
“We conditionally believe the overall market has peaked and will be plateauing in value for the short-term,” said Allister Rodgers, valuer at HTW.
“There is still an underlying desire to purchase, however seasonal conditions have placed pressure on debt serviceability with cash flow for most farming operations being impacted.”
The spring selling season is still seeing holdings enter the market in the Central West and the Western Division, though agents are reporting difficulty in bringing transactions to completion.
Major sales in the region include the 5,136-hectare Wallangambone, Macquarie Marshes which sold in September 2023 for $8.3 million or $1,616 per hectare; the 1,100-hectare Brookfield and Kalang, Wellington which sold in June for $7.75 million or $6,272 per hectare; the 691-hectare Bell River, Bakers Swamp, Wellington which sold in May 2023 for $9.092 million or $11,930 per hectare.
In Southern NSW, early October rainfall led to more favourable conditions for winter crops in the southern Riverina region.
“The rain, although very heavy in parts of Victoria, has boosted confidence for cropping operators and will provide good pasture growth for graziers who are considering holding onto stock given the historically low prices in the saleyards at present,” said Andrew Garnsey, valuer at HTW.
“Given the recent sharp decrease in sheep and cattle prices alongside increased interest rates and high input prices, it will be interesting to observe the impact on buyer sentiment in this spring sales season.”
In Victoria, there were 408 farmland transactions over the first half of the year a 38.6% drop from the second half of 2022 and a 50.8% drop from a year prior.
Cropping regions across the state have been performing well with median values up 46.4% in the Mallee for a median price of $5921 per hectare and a 1.3% increase in the Wimmera Region for a median price of $10,972 per hectare.
Cropping sales in the tightly held Serviceton area were reportedly sold for individual prices ranging from at least $22,238 to more than $24,709 per hectare.
While in south-west Victoria, the rural real estate market is currently subdued due to a limited supply of properties and lower demand compared to the past two to three years.
Though there have been a number of large-scale assets transactions in the south-west of Victoria during throughout the year.
With a Simpson dairy aggregation in the region recently come up for sale and is set to test the market, comprising six properties across two hubs totalling 1,228 hectares.
Wine production in the state and the country at large is expected to be constrained by low prices despite better growing conditions in 2023 and 2024.
“Many producers are considering changing from wine grape production to an alternative use utilising land and water,” said Carlo Vadori, valuer at HTW.
In Queensland, the rural market remains resilient despite livestock prices correcting over the last 18 months.
“From a cropping perspective the high number of stock on feed and global demand generally is supporting very attractive farm gate grain prices (which at this stage appear sustainable mid to long term). In the shorter term the drier seasonal conditions are resulting in strong hay prices,” said Bart Bowen, director at HTW.
“All of this together suggests a continued peaking of the grazing market though potentially some upside for cultivation and irrigation (particularly considering current seasonal conditions).”
Major sales across the region include the $10.8 million July sale of Caledonia, Morven, reflecting $1,969 per hectare; the $17.1 million April sale of Leawah, Bollon; and the $7.7 million August sale of Larnook, Mungallala, reflecting a $1,842 per hectare rate.
