The northern property market remains subdued with limited buyer confidence and a lack of widespread early spring rain contributing to a period of prolonged sales inactivity throughout the region.

National valuation firm Herron Todd White reports in its October market review that while the northern grazing market has seen some support for values for quality assets, buyers for smaller, less developed operations are proving hard to find.

In the Northern Territory, HTW’s Terry Roth said market activity was minimal, with buyers showing no sense of urgency to move on the various properties that are for sale, which range family-sized enterprises to larger scale operations.

While the NT pastoral industry has been relatively sheltered from the impacts of competing land uses such as mining, that could be set to change. 

More than 90pc of the NT pastoral estate is now subject to mining exploration permits, and approval has recently being granted for a resources company to commence fracking operations on Tobermorey Station near the Queensland border. 

“The concerns of the effect that fracking may have on groundwater and other issues have been well documented and it seems that these will now have to be dealt with in the NT,” Mr Roth said.  

“However, given the generally larger properties here, the impact on the pastoral industry would be expected to be less severe than in other areas of Australia.”

In the northern Queensland grazing market, HTW reports there has been some movement of Downs blocks in the Richmond and Julia Creek areas over the past six weeks. 

Sales that have occurred have supported the existing level of values, however the valuation firm notes flattening price trend is evident.

In Southern Queensland, HTW’s Doug Knight reports that values in general have continued to deteriorate over the past six to 12 months. 

“We are seeing a consistent number of properties advertised under receivership conditions and this is not expected to change any time soon,” Mr Knight said. 

“The success rate of auctions has been very low and in fact, there have been very few genuine arms length sales in the region in 2012. 

“The biggest deterrent to value is a lack of confidence. 

“There are buyers in the marketplace, however a combination of very restrictive lending practices, coupled with a high Australian dollar, increased production costs (both direct and indirect) and uncertain climate conditions are adding to local buyer hesitancy.”

On the positive side, however, the market was still seeing strong interest being displayed by foreign investment. 

These funds were generally either “food and fibre centric” (ie underpinning their food requirements domestically) or investor returns orientated (ie long term reliable returns on investment). 

Mr Knight said both sectors were adopting very rigid due diligence programs. 

“The products they are identifying have to provide for a high degree of reliability on returns and have to be strategically located so that there will be big gains in efficiencies.  They are looking for economies of scale in secure rainfall regions.”