Residential real estate may have been hit hard by the pandemic, but the rural land market has remained in tremendous health with some impressive leaps in values again in 2020.
Many older farmers are holding onto their greatest asset - their land - keeping listings tight, and low interest rates along with strong commodity prices are fuelling demand.
One of the year's biggest deals was the $20-million sale of the Maylands aggregation, comprising 1500 hectares on the Fleurieu Peninsula. The 4299ha Calgara Station, Tintinara, is believed to have also made $18-$20m, while Wertaloona Station in the Flinders Ranges sold for $10.6m in October.
Elders SA real estate manager Phil Keen said it had been an unbelievable year for the company, with nearly 50 per cent more rural sales transacted in SA from October 1, 2019 until September 30. It had defied bushfires, a market where listings were considered short, and COVID-19. The latter had even helped identify the serious buyers.
We may not see the tremendous growth of the last 12 months continue in the coming year but we are optimistic that the farmland market will remain buoyant.
"Especially in the early part of the pandemic, purchasers and vendors were keen to get straight down to business - although there was some impact with buyers in Vic not being able to inspect properties," he sad.
Mr Keen said another big jump in grazing land prices in the South East had been a highlight, as had the growth in value of cropping land, not just in the Lower North and Yorke Peninsula, but also good sales on the Eyre Peninsula. Early this year, 1784ha Wiltoo at Wangary sold for $9.1m.
Mr Keen said it was not just the biggest farmers expanding, with medium-sized family farming businesses also competing strongly.
"They have got more financial capacity with a reasonable run of good years and we are seeing the desire of the next generation to get into farming a lot more than we were 10 years ago," he said.
Looking to 2021, Mr Keen was confident ag land would remain the "investment of choice", but said uncertainty surrounding China's 'trade war' was a potential headwind.
"We may not see the tremendous growth of the last 12 months continue in the coming year but we are optimistic that the farmland market will remain buoyant," he said.
Nutrien Harcourts SA rural real estate manager Simon McIntyre described it as a "very solid year" with COVID-19 not having a major impact.
"We had to make some adjustments around inspections but there was no impact on the market pricing," he said. "If anything, it consolidated people's views on the ag market as an opportunity to invest.
"In the SE we have seen a 15-35pc variation in prices on 12 months ago, the market has grown in many areas on the back of a combination of things. We always predicted a lack of supply and we are finding that we have had a pretty good season in most areas and interest rates remain low."
He said their sales highlight was a Yorke Peninsula cropping propert - Barretts, 20 kilometres west of Warooka - which was 556ha. It made $5.15m, equating to double the values/ha being paid in the area three years earlier.
Another strength for 2020 has been residential property in country towns across SA, with the volume of sales to the end of November 35pc higher than the same period in 2019.
"We rarely see more than 5-10pc changes but after COVID there has been a shift in mindset," he said.
CBRE agribusiness director Phil Schell said 2020 had started "busier than ever", and interest in rural land had not fallen away during COVID-19.
He said $1m-$3m properties were the most sought-after, so it was not surprising the decision to split 4223ha of cropping land in the Mallee into eight parcels had paid off. This Arkana aggregation, Pinnaroo, made $14.5m, about 35pc above his expectation, selling to a number of neighbours.
Despite the previous couple of vintages being tough in most winegrowing areas, he said the value of viticulture parcels had lifted 10-15pc.
Their sales this year include 33ha Faraway vineyard at Wrattonbully with a 115 megalitre water licence, which sold in an off-market transaction for $69,000/ha.
Mr Schell said almond groves and citrus blocks were the highlights of horticulture, with olive groves harder to shift unless they were made up of high density trees.
A shortage of cropping properties for sale was continuing to push up lease prices, with some on the YP and Mid North approaching $600/ha.
He said this was "right up there" as far as growers being able to make a profit.
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