Property

Weekly property review: Quarterly update on the state of the market

Property editor Linda Rowley, 27/04/2016

OUR final property report for 2015 examined what lay ahead for the northern beef property market.

At the time, Queensland and the Northern Territory were sweating on the arrival of a long awaited decent wet season. While there was a promising start in many grazing regions in December, and indeed heavy rain in some drought-affected areas of Queensland, for many in the north, the drought is still far from over.

Four months down the track, it is timely to take another look at the state of the beef property market in key northern and southern regions of the continent.

Queensland

In December, John Burke from Elders Brisbane predicted 2016 would be a lot busier, but admitted that the dry conditions at that time in Queensland had put a handbrake on beef property listings.

“I was hoping we’d have a decent wet season right across Queensland by now,” he said. “Unfortunately that didn’t happen. Generally we have the Christmas holiday period over December-January and then people start thinking about listing their properties in February. This year, property owners sat back and waited to see if they would get some late rain, and a result, February was very quiet.”

Mr Burke said many landowners needed grass to sell a property and that had restricted the number of properties coming on to the market in areas where it had not fallen in quantity.

“However many property owners who want to move on have decided to act regardless of the weather, and the market is returning to more normal levels.”

Mr Burke doesn’t think the ongoing drought effect will impact on land values, however.

“There is still strong demand for better class and bigger beef properties, particularly in Central Queensland, and some are attracting higher prices. Demand is steady for drier or smaller properties and prices should remain that way.

“The properties with no grass are understandably harder to sell, but if you get a season then banks are more liberal about lending and people are more confident about expanding or buying property,” Mr Burke said.

Northern Territory

Sue Brosnan from Tanami Rural Property in Katherine said the speargrass country (from Mataranka to the north) had had a pretty good wet season this year.

“The majority of northern cattle stations had some rain in December, and there have been a couple of inches falling every week or two since then. Unfortunately, properties further west in the Victoria River District didn’t fare as well after early storms, and went straight into their first round of mustering.”

Further south, Ms Brosnan said there had been a rash of smaller Katherine district properties released to the market at very strong prices, taking advantage of solid commodity prices and the good level of interest from foreign and local investors.

The properties include the 139,200ha Conways, the 60,200ha Middle Creek, the 72,300 Sturt Downs and the 57,560ha Florina Stations, with renewed interest in the 42,900ha property, Wyworrie.

Brahman breeders on Florina, near Katherine

Brahman breeders on Florina, near Katherine

Recently sold NT properties include the 380,040ha Old Mt Bundey Station and the smaller 7000ha property, Lonesome Dove.

At the end of 2015, Ms Brosnan predicted Western Australia would lead property transactions this year and that has certainly been the case.

Last week, Tanami Rural sold the SAWA Aggregation in the Kimberley – comprising the 395,000ha Moola Bulla, the 260,000ha Mt Amhurst, the 206,000ha Beefwood Park and the 178,000ha Shamrock Stations – to a newly formed investment group for around $100m.

“The SAWA sale, together with the 189,000ha Yakka Munga and the 200,000ha Mount Elizabeth Stations to the Australian operating arm of China’s Shanghai CRED (known as Shanghai Zenith), are putting the level of interest in WA’s Kimberley up front,” she said.

Ms Brosnan is confident there will be further transactions in the region this year.

“It really started in July last year with West Australian mining magnate Gina Rinehart’s purchase of the 394,000ha Fitzroy Crossing cattle station Fossil Downs. A month later, this was followed by the sale of the 400,000ha Napier Downs, east of Derby, to Perth business tycoon Kerry Stokes,” she said

Ms Brosnan is predicting a significant change in the landholdings in the Kimberley and in WA and she is leaning towards more foreign investors.

Southern New South Wales

Brian Liston is a rural real estate specialist at Landmark Harcourts in Albury, on the New South Wales – Victorian border. Over the last six months, he has seen evidence of a very strong local rural property market.

“It started with a good finish to spring coupled with above average commodity prices, historically low interest rates and aggressive bank lending,” Mr Liston said.

“There is a shortage of listings. About 50 percent of the properties that I have sold over that period went very quickly without advertising. ”

Buyers were mostly locals, he said.

“There is high demand from foreign investors, however they need extra time to obtain Foreign Investment Review Board approval and properties are being sold before they have time to do that. Local farmers are cashed-up, in a positive frame of mind and are keen to expand. Most of them have their finances in order and if a property comes up, they are ready to go.”

Mr Liston said most buyers were looking to expand their current holdings, and that meant neighbouring properties were in high demand.

“Property owners are happy to sell to a neighbour if they meet a price.  I think some neighbours are willing to pay more in order to secure a property, but until you have a marketing campaign you really don’t know what those premiums are.”

“An auction is the best way to get a true indication of the market, however we haven’t had enough auctions over the last six months to get a really good benchmark.”

Mr Liston believes grazing land market values in his area have risen by 15 to 20 percent, and in some cases more, over the past 12 months.

“Most agents in this region have fewer than normal beef property listings. There’s not a lot coming onto the market and I think anything that does will attract a lot of attention.”

“The weather is a major factor. Rain seems to boost confidence. If we get reasonable autumn/winter rainfall, we should be in a very good position property-wise. The values will probably maintain their current level and could even rise further.”

 

 

 

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