Property in hot demand

Potential buyers are seeing many properties at their best season-wise and there is a rush by a wide range of buyers to invest in the economy’s shining light – agriculture.

There has been a high success rate at recent auctions, with many making above expectation. The only downside noted by agents has been a shortage of listings.

Landmark Harcourts South East real estate manager Simon McIntyre says the shortage has driven a modest lift in prices.

“We identified a lack of listings in the market, compared to previous years, at the start of the season and with demand exceptionally good, we have seen some sound results,” he said.

Two of their recent auctions highlight this, making in excess of reserves.

Last month at Whyte Yarcowie in the Mid North, 11,198 hectares (318ha arable) made $1.825 million with 13 registered bidders, and about a fortnight ago 244ha grazing property Big Hill at Watervale made $1.025m.

Mr McIntyre said grazing land was keenly sought and some continuous croppers were even looking to spread their risk.

“The reality is we have a low interest rate environment, seasonal conditions are very positive for everyone, but particularly in the grazing and pastoral areas, and the commodity prices for the livestock sector are way ahead of where they were,” he said.

“It is a good time to be offering properties, but we just don’t have enough of them.

“The last two properties we have transacted have been to buyers in the NSW Riverina and Qld, showing it is not only local interest. 

“It shows the other states are also suffering from a lack of openings in the marketplace.”

Mr McIntyre said there were still opportunities with tomorrow’s auction of 642ha-property Sunnyrise at Pekina, and 962ha at Terowie going under the hammer late next week.

Expressions of interest were also being received for 386ha in two lots of harvested blue gum land south of Lucindale, ready to be remediated back for grazing.

Elders SA rural real estate manager Phil Keen says although it is still a seller’s market, it is more about less time on the market than dramatic price increases.

“Prices are on expectation, and in some cases making more, but the stock on hand is moving reasonably quickly with increased buyer tension,” he said.

Mr Keen says there is a wider pool of potential buyers keen for rural land with a lack of confidence and some uncertainty with commercial investments, shares and financial markets.

Small, medium and larger farmers were all looking to add to their acreages, with new Australian and international investors investigating agribusiness and rural investment.

“There are three main groups in the market – those who have done their homework, have motivation and are ready to pounce with their finance organised, others that have the capacity and are doing some initial enquiry on the back of increased commodity prices (particularly cattle) and then those opportunity buyers who get motivated when neighbouring property comes onto the market,” Mr Keen said.

The Elders SA team have reported strong demand across the state for both grazing and cropping land, including Fleurieu-based agent Paul Clifford who sold three properties before they hit the market at Myponga and Inman Valley last week.

Leasing land remained a popular option for those looking to add scale and Mr Keen expected strong interest in a three-year cropping lease of 1414ha Illawarra near Kapunda, which had just been listed.

A large-scale aggregation of cattle properties for sale in the Upper SE has created solid interest from a wide range of potential buyers, according to Spence Dix & Co rural real estate specialist Greg Window.

He says the good season, exceptional livestock prices and low interest rates have created the “perfect storm” for interest in rural property, leading to a modest upswing in prices.

“There is some pent up demand after the past few years when money went into buying hay,” he said.

“It is still a very attractive and stable asset to be involved in, more reliable than the highs and lows of paper assets like shares, at least you can see it, walk on it and enjoy it, which certainly has appeal for many.”

The 4279ha properties in the Keith area are being marketed as a whole or in three lots, giving buyers flexibility.

Mr Window says investors and large graziers have a chance to increase their scale further with the 2275ha Carcoola aggregation and 1471ha Mossdale, but there is also the opportunity for those starting out to acquire 532ha Davalack Downs.

“There is a reasonable balance of soil types from sandy loam hills to heavier flats and pink gum country developed into lucerne,” he said. 

“The area is renowned as a productive breeding and fattening district with its year round production.”

The present owners, who began buying land in the area 12 years ago, have made a significant investment upgrading the water infrastructure and a 2300ha pasture renovation program across the properties.

The aggregation has been running 885 breeding cows, 1900 ewes plus hay and pasture renovation.

Expressions of interest close next Thursday.