SA’s rural real estate market has reached fever pitch with many regions posting new property value records during spring.
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Nearly all properties up for auction have sold under the hammer, including 392.6 hectares at Curramulka on Yorke Peninsula, which made $16,403/ha – possibly a state record.
High demand has helped some listings sell prior to auction or expressions of interest closing, as vendors take offers too good to refuse.
Ray White Rural SA joint principal Geoff Schell says it has been the franchise’s most outstanding spring selling period in their decade in rural real estate sales.
Earlier in the month, they sold 269ha at Farrell Flat for $1.5 million, bringing their total spring sales value to more than $19m.
“We have sold 11 from 11 rural properties,” he said.
“We started with two EoI, including one at Hallett which sold prior to the closing date and another near Booborowie, then had seven very successful auctions in the past two months.
“The last one was to be auctioned on Thursday (last week) but we received a very strong offer for the vendors to instruct us to stop the auction and we have also sold two outstanding properties off-market.”
Mr Schell believes property values have risen 10 per cent to 15pc in the Mid and Lower North, with most making well above reserve.
“Many are larger family farms getting bigger but there are definitely more investors interested in the area and a couple who bought and have then leased back the land,” he said.
“Returns of 4-4.5pc are achievable and considered quite solid as an investment as well as a positive trend of capital gain.”
Colliers rural and agribusiness associate director Jesse Manuel says record property values are being achieved right across the state, with the most significant uplifts occurring in the Mid North, Yorke Peninsula and Lower South East.
“Buyers are seeking reliability and economies of scale and they are prepared to pay for it,” he said.
“The high values that we are seeing in the most reliable regions are putting upward pressure on land values in the more fringe country but there is strong enquiry right across the board.”
Buoyant commodity prices were the major driver.
“Strong livestock and wool prices have led confidence in the market and irrespective of one’s opinion regarding the longevity of these prices, there are enough buyers in the marketplace that have a long-term strategy,” Mr Manuel said.
“We expect agricultural land prices to increase steadily for the foreseeable future.”
Landmark Harcourts real estate sales specialist Simon McIntyre said a shortage of supply had helped lift prices.
“It is difficult to say across the board what the percentage rise has been but the most recent sales have certainly set some new benchmarks,” he said.
Mr McIntyre said pastoral sales had exceeded expectations, particularly Mt Lyndhurst which made more than $7 million, and there had been some exceptional Mid North grazing interest.
“The opportunity to diversify is an attraction and they (buyers) are seeing prices for livestock hanging about for 12-18 months,” he said.
Among its spring sales, Landmark Harcourts also sold 643 hectares near Pekina for $2.48m, making the average price a hectare swell to $3863 in the region.
Mr McIntyre expects the market will hold “very firm” into 2017 and encouraged potential sellers to take advantage of the “three stars” – low interest rates, high commodity prices and the season.
“The variable component is seasonal conditions, but if we get the normal break in the season, I am confident we have a great period ahead,” he said.
Elders Kingscote also held a successful spring auction day in late October, with three KI properties auctioned at the Aurora Ozone Hotel.
MacGillivray property Half-Way made $1.28m at auction, while Conmurra was held on a vendor’s bid of $750,000 and sold later in the day for an undisclosed price.
Wallers sold at auction for $1.3m to a Sydney investor.
