Rural land values tipped to remain healthy in COVID-19 crisis

SA property prices: Rural land tipped to remain strong

Property
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THERE are fears some residential real estate prices could take a hit due to the COVID-19 crisis but rural land values are expected to hold strong, according to agents.

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THERE are fears some residential real estate prices could take a hit due to the COVID-19 crisis but rural land values are expected to hold strong, according to agents.

And while the days of buyers packing into town halls and sports clubs for auctions may be gone for now due to government restrictions, they see no reason why expressions of interest and online auctions will not deliver similar results - especially if the season is kind.

RELATED:SA property market: Dry to slow sales surge

Elders rural real estate manager SA/NT Phil Keen said the SA rural property market had been "full steam ahead" in the first quarter of 2020, with some areas continuing to break records.

He said it was a bit early to gauge the impact of COVID-19 and acknowledged there may be some short-term "market jitters", but was optimistic that once we came out the other side of the pandemic the market would be at similar levels.

Acquiring agricultural land will be a focus for those wanting to be a part of an exciting future. - Phil Keen, Elders real estate

"People like clarity and they don't have it at the moment because of the COVID-19 virus, but I 100 per cent think that if anything in this crisis changes things it will get the world very focused on the things that people really need," he said.

"That is shelter and food - so our clean, green international reputation of producing quality food will likely increase demand for our commodities.

"Acquiring agricultural land will be a focus for those wanting to be a part of an exciting future."

Mr Keen did not expect the ban on holding physical auctions to affect sale outcomes either.

"The percentage of the properties that we take to auction here in SA is not the majority of what we do and there are a lot of different portals available, probably up to 10, where we can livestream in conjunction with an auction or be online only," he said.

"We all like face-to-face business but in ag we are already accustomed to using technology such as AuctionsPlus, which has opened up markets for livestock across the country.

"There is a possibility that what may happen is, particularly the larger properties, people will start searching interstate more."

Bosworth Station, via Woomera, which Elders was to go to auction on April 15 will instead be offered by expressions of interest closing on the same date due to the government restrictions.

Landmark Harcourts SA rural real estate manager Simon McIntyre said the fundamentals had not changed despite COVID-19 concerns, with solid demand for most rural commodities, record low interest rates and a lack of property listings.

"We are in the business of producing food products - whether it is from cropping land or livestock - they are all an essential element which has been proven in recent weeks," he said.

"We just need some opening rains in April, if we can get a return to a normal season and element of normality back into the ag sector the market will continue along."

KEITH LISTING: Expressions of interest closed on Monday for 718-hectare Hayfield, Keith, which was marketed through Landmark Harcourts.

KEITH LISTING: Expressions of interest closed on Monday for 718-hectare Hayfield, Keith, which was marketed through Landmark Harcourts.

Mr McIntyre said they had a couple of small auctions which they had to call off but believed the rural market was strong enough to withstand any selling method.

"We are currently marketing a couple of properties off-market down through the South East and getting a solid level of demand, which is really positive," he said.

"One thing that will be more important than ever in this environment is planning a marketing strategy well ahead."

"Hopefully COVID-19 is not a long-term thing. We are already planning for spring and having spring auctions subject to the legislation."

Mr McIntyre said the area of the market that may "feel the pinch" was the lifestyle sector - small acreages on the fringe of Adelaide - which were more of a discretionary spend.

Ray White Rural SA Principal Geoff Schell said at this stage he had not seen any noticeable change in the level of enquiry for quality rural properties in these "unprecedented times".

"Even in the last two weeks as things are changing daily (with COVID-19 restrictions) we are still seeing a very strong level of enquiry for expression of interest in a quality farming property at Hilltown, with the EOI closing today," he said.

Also an auction at Marrabel that Ray White Rural SA held a fortnight ago attracted strong interest and an outstanding sale result.

The 218.4 hectare property, Roehrs, made $2.18 million.

Geoff, Mark and Brooke Humble were the successful buyers of Roehrs at Marrabel a fortnight ago for $2.18 million. They are with Ray White Rural SA's Geoff Schell and Daniel Schell (right) and vendors Clinton and Jenna Nickolai and their son.

Geoff, Mark and Brooke Humble were the successful buyers of Roehrs at Marrabel a fortnight ago for $2.18 million. They are with Ray White Rural SA's Geoff Schell and Daniel Schell (right) and vendors Clinton and Jenna Nickolai and their son.

Mr Schell said Ray White Rural SA were strong believers in the auction system to maximise competition and sale results for their vendors and they would look to online auction options which they would use until government restrictions were lifted.

In early May they will test this with the online auction of two lots, a small farming property of about 53 ha and the homestead block with 34ha located at Robertstown.

Mr Schell also expected strong interest for a first-class new listing, the 1658-ha Honan Estate at Hallett and Whyte Yarcowie , being offered in five lots by expression of interest, closing in early May.

"Our belief is that the agriculture sector in Australia is seen as a safe place to be," he said.

"I don't think that we will see any less enquiry or demand for quality rural land, but something we might have to change and reconsider is our marketing processes and planning time frames.

"With changes to the processes in the agribusiness finance sector in the last 12 to 18 months , following the banking Royal Commission, our network of agri bankers is telling us that the approval process is taking longer so we may need to look at extending the periods from the start of our marketing campaigns to auction and settlement periods."

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