RURAL property sales have enjoyed a bumper year, with plenty of multi-million dollar properties changing hands and dollar a hectare district records tumbling, defying the dry season in many areas.
Agents remain bullish it will continue into 2019, with listings in short supply and a strong commodity price outlook.
The biggest single ag transaction for the year is believed to have been a 32-shed broiler chicken farm in the Lower North that made $33.5m.
But Stock Journal understands 16,500-square kilometre Clifton Hills Station, on the Birdsville Track near the SA-Qld border, will surpass this when it settles next week, with a price tag of about $45m. The deal includes about 18,000 cattle.
Elders state rural real estate manager Phil Keen says the highlight of 2018 has undoubtedly been the red-hot demand for South East grazing land.
District per hectare records have fallen on many occasions, including Dalmeny near Robe, which sold for $11.3m in three parcels at auction last month.
“A lot of country in the SE is now making from $4000 to $4600 an acre whereas back 12 months ago a lot of the same country was making low $3000 an acre and the year before that it (the value) probably had a two in front of it,” he said.
Mr Keen says pastoralists looking to drought-proof their businesses were adding to strong local interest and the area was having an outstanding season.
“Normally when it is dry up north pastoralists rein in their spending but with three good years in the cattle market, until the past few months, many people have been paying down a lot of debt and are confident in the future,” he said.
“Wool has come off its real high but is still very good and lamb prices didn’t go below $7 a kilogram in the flush of the season in October-November, so buyers are willing to have a crack to keep their breeders or that line of ewes.”
Mr Keen predicted prices to remain “equally as strong” in 2019, although lending criteria to the rural sector may tighten as a result of the banking royal commission.
Landmark Harcourts SA-NT real estate manager Simon McIntyre said the dry season had “taken the edge off confidence” but the ag outlook was still strong, especially for livestock.
Buyers continued to seek out reliable cropping areas, with the sale of Pine Point in tightly-held Yorke Peninsula one of the highlights of 2018, selling in six parcels for $15m-plus.
“Reliability and rainfall continue to be king in any business and the level of demand in the South East has been unbelievable too,” he said.
The 73,300ha Netley Station, near Broken Hill, NSW, also attracted interest from five states and fetched in excess of $10m on back of strong livestock prices.
Mr McIntyre said to achieve the best prices, sellers needed to create “competitive tension” through auction or registration of interest process.
Colliers International agribusiness associate director Jesse Manuel expected more records to be set in the market in 2019, due to the large number of interested buyers.
“There is still plenty of pent up demand for rural properties in SA,” he said.
“We believe there is at least another 12 months of buyers to move through the system until a market equilibrium is reached and we see the market flatten out.”
Mr Manuel said horticulture properties in the Riverland had been highly sought-after in 2018, with values for almond and citrus orchards reaching in excess of $60,000/ha, excluding water.
River Murray water values have been one of the strongest performing assets.
“We sold a 1700-megalitre parcel of water in November for around $4000/ML and already in December prices have exceeded $5000/ML for high security water entitlements for irrigation,” he said.
On the general farming side, overall, the South East saw the most activity in 2018 with auctions for farm build-up blocks well-exceeding reserve prices on the back of strong returns in wool and certain segments of the red meat market.
Mr Manuel said pastoralists from the drought-affected areas in pastoral SA and Western NSW competed with locals to secure high-rainfall grazing country in the Lower South East.
2018 Blue ribbon sales
- Gallina Farms, Beaufort: 32-shed broiler chicken farm makes $33.5m (Colliers International)
- Pine Point: YP cropping land, 1483ha for $15m-plus (Landmark Harcourts)
- Burdon Orchards, Moorook: 160ha almond orchard for about $15m (Colliers International)
- Calcannia, Clare: 905ha made $11.65m (Ray White Clare Valley)
- Dalmeny, Robe: 1428ha for $11.3m (Elders)
- Netley Station, Broken Hill, NSW: 73,300ha made $10m-plus (Landmark Harcourts)