THERE’S now a broad range of evidence suggesting that the southern Queensland property market is on a run, valuer Doug Knight says in the August rural market review produced by Herron Todd White.
“We all knew it was coming, but now there is no doubt it has arrived,” Mr Knight said.
“While it is obvious that the increase in the market to date has not been consistent across all the regions in southern Queensland, there is a broad level of momentum building.
“There are sectors and industries out there that always lead, and this time around it would appear to be no different, with cattle again appearing to be the catalyst for demand,” Mr Knight said.
“Hindsight is a wonderful thing, but given that there has now been a shortage of cattle in Australia for the past 12 months or so, the likelihood of an upward market adjustment of this nature occurring was always on the cards. The issue is however how far will it go?” he said.
The ‘golden triangle’ area bordered by Taroom, Roma and Wandoan had set the pace, he suggested.
“It is now evident that over the course of the past 12 to 18 months, the property market within this sector has risen by 25 to 35 percent. In some instances where adjoining owners are involved, this increase is even higher.”
Recent settled sales include Bracco, north-west of Roma selling in September 2016 for $2439/ha ($1000/ac); Myrnong in a similar location selling at auction for $2523/ha (just over $1000/ac) and Nardu northeast of Roma selling for $2151/ha ($870/ac).
Mr Knight said these results indicated that there had been some shift in the size of the premium that neighbours could justify to expand their existing holding.
“Previously, it was accepted that for an adjoining owner who had the ability and was prepared to pay a premium, that premium was in the order of 10pc or so; one fully justifiable.
“However that accepted level is no longer evident. We would suggest that such ‘neighbour’ premiums could be as high as 20pc. Whether they are justifiable or not is another question and one that can only be answered by the buyer.”
Run on irrigation country
HTW also noted a run on irrigation country on southern Queensland’s inner Darling Downs. Sales advised as occurring, but yet to be fully confirmed include Warra Warra at Brigalow, Bandawing south of Bowenville and Campbells at Tummaville.
“Initial unconfirmed evidence would suggest that there is some market movement occurring in this sector as well, but until they settle, we cannot confirm to what extent.
It was also common knowledge that Clover Downs at Cunnamulla had sold for circa $27 million. The corporate-owned holding of 125,295 hectares is a trophy holding that was acquired by Hassad Australia in July 2010 for $18.576 million. That reflected an increase in value of the order of 45pc over seven years.
“The big takeaway from all this is that the evidence suggests that the upward market adjustment in this region is not just limited to one sector. Broadly we are seeing a uniform adjustment in the market, something that has not been seen for a long time,” Mr Knight said.